Have you ever been in a situation where you needed access to capital so you could cover an unexpected event? This could be an unexpected medical expense or paying to repair your vehicle.
If needed, you can even use the installment loan to pay for your dream vacation or a weekend getaway. Missouri installment loans are excellent financial products that help you cover a large purchase or take care of an unexpected situation.
So how do you qualify for this type of loan, and how do you find the right lender? Continue reading below to learn more about the best Missouri installment loans, where you can go to apply, and who you can reach out to for more information!
What Are Installment Loans?
Missouri installment loans are loans that are commonly used to purchase property or to pay off debts. These loans are closed-ended, and you pay the debt back over a certain period of time. They are closed-ended because, unlike a credit card, once you pay back the loan, you no longer have access to that money.
How Do Installment Loans Work?
Once a lender approves you for an installment loan, you almost immediately receive the money and use it as you see fit. Depending on your bank and the lender, most people receive their funds either the same day or within one to three business days.
You then pay off the debt in regularly scheduled payments, also known as installments. You typically owe the same monthly amount for a set number of months or years.
Depending on the lender, you may owe payments weekly or bi-weekly. As mentioned above, once you finish paying off the loan, the account closes, unlike a credit card.
Benefits of Installment Loans
One of the most significant benefits of using an installment loan is the quick access to capital. Once the lender approves your application, you typically receive the funds within one to three business days, depending on your bank. You can then use this money to pay off your debts or to purchase whatever you need.
Bad Credit Is Acceptable
Most lenders who offer installment loans take people of all types of credit backgrounds, including those with little to no or bad credit. It is important to note that the lower the credit score, the higher your interest rate may be. If you have a decent credit score of 650 or above, you will most likely receive better rates than those with lesser scores.
Longer Repayment Terms
Depending on the lender you decide to partner with, you may have a longer repayment term than other lenders. Some have shorter repayment terms of a few weeks to a couple of months, whereas others can give you one to two years to pay back what you borrowed.
Installment Loans Build Credit
If you have little to no credit or bad credit, you can use an installment loan to help build your credit score. As long as you make your payments on time, the lender will report to the three major bureaus, which can positively impact your credit.
Disadvantages of Missouri Installment Loans
Although several excellent benefits come with getting Missouri installment loans, there are a few disadvantages you should be aware of. For example, some lenders participate in unfair lending practices, also known as predatory lending.
Those who partake in predatory lending tend to charge their clients unreasonably high-interest rates, making it nearly impossible for them to repay their debts. If they are unable to repay those debts and the borrower defaults on their loan, the creditor may sue the borrower for that money.
Possible Long-Term Commitments
Some installment loans come with long repayment terms. This means you would have to commit to making regular payments over a long period.
Some lenders impose earlier prepayment penalty fees if you try to pay off the loan sooner than the listed terms and conditions. Before you sign anything, make sure the lender does not have any prepayment penalties.
Not Open-Ended
As mentioned earlier, most installment loans are close-ended. This means that once you pay off the loan, you no longer have access to that capital. If you need something that has open revolving credit, you may want to look into a credit card instead.
Qualifying for an Installment Loan
Before you can get an installment loan, you need a few things. For example, check your credit score and debt to income ratio before applying for a loan.
These two things play a significant factor in the approval process. Some lenders look at your credit score, whereas others make their decision based on your income.
Compare Different Lenders
It is important to note that each lender has its own terms and conditions for what borrowers they approve or deny. It is best to compare different ones to ensure they meet your needs.
If you want to learn more about a lender, take a look at their reviews. See what other clients liked or did not like about a certain lender and how the application process went for them. You can use reputable websites like Yelp or the Better Business Bureau to better understand the interactions clients have with a particular lender.
Pre-qualify with Lenders
There are some lenders that provide you with a pre-qualification option. This allows you to see what potential loan amounts, rates, and payments you can expect without having to go through a hard pull.
Instead, the lender conducts a soft pull on your credit which won’t hurt your credit. Even if you receive a pre-qualification offer that you like, keep in mind that the interest rate and amount approved may change once you actually submit your application.
Consider a Co-signer
If you don’t have a fair credit score, you may want to consider getting a co-signer to help boost your chances of approval. When you use a co-signer, you not only boost your chances of approval but also increase your chances of a higher loan amount or a lower interest rate.
If you decide to use a co-signer, make sure they are well aware of the repercussions if you aren’t able to repay your loan. If you don’t make your payments and you default on the loan, the lender may go after the co-signer to recoup the debt.
How to Apply for a Missouri Installment Loan
Once you find a lender that you wish to use, you can submit your information to them for approval. Before you apply, you should have a few things on hand.
Important information to have on hand:
- Personal identification such as a state ID or driver’s license
- Income information (paystubs or deposit statements)
- Best contact phone number
- Home address
- Social security number
- Reason for the loan
- Employer information
Each lender has their own requirements for what they need from you before they approve the loan, but those are a few things common amongst all lenders. If the lender needs any other information from you, they will let you know during the application process.
Fill Out the Form
With that information on hand, you can now apply for the loan. Be sure to thoroughly fill out the information on the form before you send it in. If you plan on using a co-signer, they too will need all of that information listed above.
Wait for Approval
Depending on your lender, you may receive the decision the same day or within the next 24 to 48 hours. Once you receive your approval, be sure to read over the terms and conditions before you sign your name.
If you agree with the terms and conditions of the loan, you can then sign, and you should receive your money within one to two business days. As mentioned earlier, make sure that you make your payments on time to avoid defaulting on your loan. This is especially important if you have a co-signer as they too are on the hook if you default on the loan.
Best Missouri Installment Loans
Missouri installment loans are excellent for those who need money quickly to cover an unexpected expense or to make a large purchase. Although they have excellent benefits, they also have a few disadvantages that you must keep in mind before you apply to just any lender.
If you are ready to find out how much you qualify for, contact us today! We are here to answer any questions or concerns you may have about the application process.