An installment loan is simply a form of contract or agreement between a lender and a borrower that involve a loan which is paid over time with an agreed amount of scheduled payments; usually at least two payments have been made towards the installment loan. The terms of repayment can be up to a month and as long as thirty years. The lender or company that issued the installment loan will also be the one who owns the installment note, or lien. This means that the lender will own the interest in the debt and it is the way that the lender makes money.
This is not to say that all companies online for installment loans with no credit check are unscrupulous or fraudulent; but there are many that are. Most of the companies offer installment loans online for bad credit on the basis that if you make your payments on time then they will issue you additional credit to use as needed. They often require a post-dated check with the amount owed, when that check is cashed the company deducts the amount owing from the balance of the loan and issues another check for the amount still due. When the first check is cashed the second payment is due and so on. That is the scam in a nutshell.
You do not need a credit check to apply for these types of loans. There is no obligation whatsoever to participate and there are no questions asked. If you decide after you apply for one of these loans online for bad credit that you do not want to continue, then you should be able to cancel the loan without any penalty being assessed. You cannot cancel the loan once it has been approved.
If you are unfamiliar with installment loans, then you should know that they are fairly new in the loans industry. They have been around for quite some time and they were once called credit checks. The credit checks that they offered back then were designed to find out if you had any way to pay off the debt before they would issue a check to you. They still offer this service, but the only people that they will allow to participate are those that own homes.
They are available through a number of companies now, so you will not be limited in the companies that you choose. This makes the process of finding installment loans for those with less than perfect credit easy. You can compare offers from a variety of lenders with the click of a mouse.
It is not uncommon for these types of loans to carry higher interest rates and fees than other types of loans. They do, however, offer other benefits. The biggest benefit is that you will not have to create an account for the loan, nor will you have to worry about a credit check being performed on you. This means that you will not have to answer any questions about your credit history or financial history. If you have a poor credit score, then this can make finding an installment loan difficult, if not impossible.
Some people who have less than perfect credit cannot get installment loans, no matter how much money is put up for them. They might have no credit history, have bad credit, or have a bankruptcy judgment on their record. For them, these loans are the best way to go. With them, all they would need to do is to make the monthly payments. After they have made the monthly payments, they will have paid off the debt and be debt free.
In many cases, these installment loans also come with other great perks. For one, you are not required to create an account for the loan, which means that your information will not appear on any credit report. This is also good for you, because if you ever need to dispute any information on your credit report, you will have a clear history of the transactions that were made. Finally, with installment loans, you can have the amount you pay each month increased, in order to pay down the loan faster. This will allow you to pay off your debt more quickly, which can help you to avoid a large debt all together.