An installment loan can provide some blessed breathing room when money is tight, when unexpected expenses hit, or when you simply have needs your bank account can’t accommodate.
Is it the right choice for you? If you need an installment loan, how do you find one? And what steps do you have to take to get it?
Let’s go through the most pressing questions so you can make an educated decision and know what to do next.
How Installment Loans Work
Installment loans are a well-known financial product—there’s a good chance that this is what comes to mind when you think of a loan.
This is how they work:
1. You apply for a loan.
2. If you’re approved, you’ll be presented with an official offer that includes terms and conditions. Read this carefully! It determines your obligation for repaying the loan. Look for important information like the following:
- Loan Amount: The total amount of money you’ll receive when you accept the loan conditions.
- Interest Rate: The percentage that indicates how much interest you’ll pay on the loan. A fixed interest rate should be consistent over the life of the loan, but a variable interest rate can change with market conditions.
- Monthly Payment: The amount you’re responsible for repaying in installments, which are usually monthly. The monthly payment is determined by the total loan amount, the interest rate, and the length of the loan.
- Repayment Period: How long you make payments until the loan is fully repaid.
3. You receive your funds. You’ll get the entire loan amount at once. The speed of disbursement varies, but Power Finance Texas customers can receive their money as soon as the same day.
4. The repayment period begins. You’re responsible for paying off the loan as described by the agreement, usually in regular monthly installments. Many lenders offer automatic payment options for your convenience.
5. After making all payments as scheduled, your debt is repaid and the loan is closed.
How Do I Find an Installment Loan?
If you’re a Texas resident with a valid ID, you can submit an installment loan form right here at Power Finance Texas. We have very basic requirements, and most loans are approved within minutes.
Other options include:
- Banks
- Credit unions
- Online lenders
- Peer-to-peer lenders
If you look for an online lender, be extremely careful. Do your research and make sure you’re dealing with a legitimate business with a good reputation.
How Can I Get Emergency Cash Immediately?
If you’re looking for instant cash with an installment loan, your lender should be able to give you an estimate for when you’ll receive the funds. But be aware that they may not give you a precise answer.
For example, Power Finance Texas offers a disbursement option that can deliver you approved loan funds as soon as the same day. But note that language—it’s intentional. While many of our customers can and do receive their funds the same day their application is approved, it’s not something we can guarantee. You’ll find similar language from many lenders.
Other options for immediate cash might include selling your possessions on apps like Facebook Marketplace, working a gig with an instant payout option, or pursuing a pawn shop or payday loan. But take care with those last options—as with any loan, make sure you understand the terms before agreeing.
What Is a Hardship Loan?
Some lenders offer hardship loans to borrowers who can demonstrate emergency expenses in the face of financial distress. This is a special consideration given to the lender’s regular loan products; the actual loan would be an installment loan or another standard loan type, but it may have more lenient terms or application requirements to help those in need.
Hardship loans aren’t standardized, so terms and availability vary greatly. You’ll need to ask your lender about their policies for more information.
Can You Be Denied an Installment Loan?
Yes. You can be denied any loan if the lender has reason to believe you will not repay the money according to the stipulated terms.
Possible reasons for rejection include:
- Low Credit Score: Many lenders check your credit score, and they may have a minimum credit rating that you’re unable to meet.
- Too Much Existing Debt: Debt-to-income ratio is an important number for many lenders. If they determine you already owe too much money, they’ll be hesitant to lend you more.
- Insufficient Income History: Even lenders who don’t perform a hard credit check are likely to look at income pretty closely. Remember that their goal is to ensure you’re able to repay the loan as agreed. They’ll want to make sure you have enough money coming in and that you’ve had your job long enough to suggest stability.
- Poor Payment History: If you have a history of not paying your bills (including loan payments), lenders may be hesitant to offer you a loan. They’ll assume you won’t pay this one either.
If you get denied, you have a few options. You could try another lender who might have different approval criteria, but be careful—applying at too many places in a short time looks bad to lenders and can risk further denials. But different lenders do look at different factors. For example, an online lender might allow lower credit scores than a traditional bank. You might want to start there.
You can also look into other loan types that have less stringent requirements. Pawn shop loans don’t tend to reject a lot of people since they’re based on collateral, for example. Payday loans have a high acceptance rate for borrowers with an established work history, although their interest rates tend to be high.
How Do I Apply for an Installment Loan?
Gather pertinent information like pay stubs, your Social Security number, your ID, and your latest tax return. Your lender will have some sort of application to fill out. Many allow for online applications.
All you need to do is submit the application and wait for a response. Sometimes, you might get a request for more information.
Find the Right Loan for You with Power Finance Texas
If you have a Texas ID, a working phone, a job you’ve held for at least three months, and income of at least $1,000 a month after taxes, choose Power Finance Texas. We offer quick-response loans of up to $1,250.
Fill out our loan form to get the installment loan you’re looking for.