Lending organizations like Blue Trust Loans provides an alternative to payday lenders. Customers in certain states can apply for installment loans. After a quick approval process, the money is deposited directly into their checking account. The money is paid back with several payments over six months or longer. Payday lending products require payment of the entire loan amount plus finance charge with the person’s next paycheck.
How It Works
Payments are automatically withdrawn from the checking account that the money was deposited into. Customers can make payments early with a debit card if they so choose. They also can pay the entire loan off early and save money on the finance charge, as there is no prepayment penalty. Interest generally is lower on installment loans than on payday loans.
These types of companies typically do not perform hard credit checks. Some require verification of income while others do not. They also generally do not report to credit bureaus, so these loans are not strategies for rebuilding bad credit. An active checking account is necessary, and it cannot have been opened just yesterday.
The Amount Available
The amount available for borrowing depends on numerous factors. Some companies, for instance, offer a lower amount to new customers and then a higher amount after that initial loan is paid back.
Reasons to Apply for Installment Loans
People who need money quickly and can’t borrow it any other way are the most common customers of companies making installment loans. This usually is an emergency source of credit when something unexpected occurs. It’s not intended to be a regular source of credit, though, because the interest rate is high. Consumers who are having trouble making ends meet every month need to find a more sustainable solution, such as taking on another job, cutting expenses or seeking help from a debt counselor.
Once in a while, a circumstance arises in which a person can actually use this type of loan for a financial gain. For instance, if he or she will get paid on Friday but can buy a great used car at a very cheap price on Monday, getting an installment loan and paying the entire amount back that Friday can make sense.