What Do You Need to Borrow an Installment Loan Online?
What Do You Need to Borrow an Installment Loan Online? – Are you looking for an installment loan online, but not sure what you need to apply? There’s more to it than just asking for the money. Lenders need to know a little bit about your financial situation before they feel comfortable granting you funds — and that’s not to mention the info you need to know to ensure you’re making smart decisions about your finances.
Luckily, online installment loans are convenient and simple by design. You’ll need certain equipment, information, and documents to fill out an application. Keep scrolling to learn more.
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Online loans require a little bit of tech before you’re ready to fill out an app. Unlike a branch-based loan, where you’ll fill out a paper application in person, you’ll have to submit your personal details over the web.
With a name like online loans, that much is obvious. What might not be as clear is how to do it safely.
Use a Trusted Device
First, you’ll need a device that can access the web, like a desktop, laptop, tablet, or even your cell phone. If you visit a financial institution like MoneyKey, you’ll see its site has been optimized for mobile visitors. You’ll be able to apply for an online installment loan through your smartphone as a result.
You’ll need a device long before you get to the application process. Many online direct lenders don’t have a physical branch, which means you can only learn about them by going online.
When choosing the device from which you’ll search, compare, and apply for online loans, you’ll want to make sure it’s a trusted device. This is a computer or phone that you use often and isn’t something you share with strangers.
Use a Secure Connection
Next up, you’ll need an Internet connection to hop on the web, but it can’t be just any free Wi-Fi. Unsecure networks available at the library or coffee shops are easily hacked.
Anyone with a bit of know-how can trace your activity and eavesdrop on everything you do while connected to this Internet. That includes banking info, passwords, and other personal information you should never share.
To avoid this hack, always do your banking from a secure network you trust — whether you’re applying for online loans or paying one back.
Once you’re ready to browse safely, your next step is to understand how your current financial situation affects what you can borrow. Here are two critical things to consider before you fill out an application.
1. Your Credit Score
Your credit score (a three-digit number falling between 300 and 850) plays an enormous role in how easily you can get approved for a loan. Many financial institutions, including online direct lenders, look at your score to decide if:
- They’re willing to lend you money.
- How much you’ll pay in interest, charges, and other fees.
Generally speaking, a low score (or anything below 669) means you might be denied funds from certain lenders. And if financial institutions approve you, you’ll probably pay higher rates.
Knowing where your score falls on this range is helpful because it gives you a better idea of which lenders will approve you and the cost of this approval.
2. Your Budget
Don’t borrow more than you can afford to pay back is the golden rule of loans. You might not know where the line is if you don’t check in with your budget.
Check to see what kind of cash flow you have after you pay for the essentials, savings, and other debt payments. This is your limit, and your installment loan (plus fees) shouldn’t surpass it.
To help you understand how much installment loans cost you, compare the rates and terms of several financial institutions. Pay close attention to APR (annual percentage rate) as this shows you the combined cost of interest, fees, and any other possible charge over the lifespan of your loan.
Once you know which financial institution you want to ask, it’s time to fill out an application. These applications give lenders a good idea of where your finances stand right now, which can help them determine your creditworthiness.
Creditworthiness is just a financially fancy way of saying whether or not you’ll repay what you owe on time. Lenders may calculate it by looking at your credit score, employment history, and income.
Proof of Identity and Contact Details
No lender wants to get duped by a fraudster, so you’ll have to provide proof of ID to show you’re really who you say you are. Your contact information (address, phone number, and email) is another way to verify your identity. This info also gives your lender a way to reach you.
Employment and Income Info
This information lets a lender know whether you have a steady source of income. Your income may help them determine if you have the cash on hand to cover your eventual payments.
Credit Check Approval
You have to give permission before a financial institution can check your credit. It’s the law, so you’ll likely have to click something that acknowledges you consent to this check.
Some financial institutions may not check your credit, but they often provide costly same day cash advances, so be wary of any lender that skips this step.
After scrolling this far, this list might seem very long. But in reality, these items are pretty simple. The hardest part will be crunching numbers in your budget to ensure you’re getting something that fits your finances.
If you’re finding this step difficult, don’t skip it — try a calculator to help you find out what you can afford. This way, you’ll get the best possible option for your needs right now.
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