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Direct installment Loans Lenders can provide solutions in times of financial need. Read on for an installment loan definition and how finding a loan that suits you can drastically change your financial situation.

According to The Journal of the American Medical Association (JAMA) Network, about two-thirds of adults worry about their ability to afford unexpected medical treatment for themselves and their families.

This isn't surprising as there is at least one surprise bill in 18% of visits to the emergency room. These can be just as worrying as unexpected car or emergency home repairs and they usually all have one thing in common. They're all expenses that you must pay but haven't budgeted for.

Unfortunately, this is a predicament that was probably experienced by many during the pandemic with sudden changes to health, career, and living situations.

Read on to find out what installment loans are, and how they can help you.

Installment Loans Definition
Any installment loan definition will typically refer to an agreement or contract that involves an exchange of money usually from a lender to a borrower. It's a loan that allows a borrower to receive a specific amount of cash at one time. The borrower pays the loan back based on the terms outlined in the loan agreement.
How does an Installment Loan work?

Suppose you apply and get a loan for $5,000. In this example, let’s say the loan has interest with an Annual Percentage Rate (APR) of 10%. Let’s also say the agreement is to pay the loan back in one year in 12 monthly installments.

With each payment you make, a portion will be applied first to accrued but unpaid interest. Once the accrued but unpaid interest has been paid, the remaining portion of your payment will be applied to reduce your principal balance. As you pay down your principal balance, the amount you pay in interest with each successive payment will reduce as well.

Therefore, on a $5,000 loan, the total (principal + interest) you are required to pay back by the end of the loan period is $5,274.95

Once you make the 12 on-time monthly payments you will have repaid the loan.

What are online Installment Loans?

Direct lender online installment loans are loans you apply for directly from an online lender. The application, processing, and decisioning of the loan all take place virtually. There is no need to go to a physical location which makes the process faster and easier than a traditional installment loan obtained through a bank or credit union.

Some online lenders offer pre-approved installment loans. The great thing about a pre-approved loan is that you are more much likely to receive funded loan. This allows you to compare options from various lenders before you decide on the loan you want.

Installment loans are a hassle-free option that's ideal for unforeseen events that require immediate funding such as medical expenses or car repairs.

How You Can Use an Installment Loan?

Installment loans are a convenient, hassle-free way to cover an emergency expense. Applying for one is straightforward and the approval process is quick. What's even better is that you can get the money as soon as today.

They're an ideal way to cover:

  • Unforeseen expenses including medical bills, car or home repairs
  • Specific events that require a significant amount of cash such as a down payment toward the purchase of a car
  • Late payments such as overdue utility bills

Installment loans also provide an opportunity to build your credit. Paying your installments on time may even help to increase your credit score. You can also pay off your current debts or consolidate your debts for easier repayment.

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How it Works

How to Apply for an Installment Loan?

You may wonder how you can get an installment loan. The process is as easy and as fast as its approval. Most online lenders usually require the following:

  • Completed Online Application
  • Proof of an Active Bank Account
  • Proof of Income
  • Social Security Number

The online application will require personal information such as your name, email address, physical address, and the loan amount you require. Most online lenders have a minimum and maximum amount that they will lend you.

The loan approval process takes place once you've submitted all the relevant information. When the lender informs you of their decision, you usually receive the cash as soon as today.

Installment Loans vs. Payday Loans

Installment loans are often confused with payday loans but they are not the same. Although both provide a way to access cash fast and easily, the method of repayment of each differs.

Payday Loans
A payday loan can help you access cash immediately. It's a short-term loan usually for smaller cash amounts. The concept of a payday loan gives you the ability to cover financial emergencies that may occur before you get paid. Payment is usually due within two weeks as you're supposed to use the paycheck you receive after getting the loan to repay it.

Unlike installment loans, payday loan installments do not exist. You must provide a lumpsum repayment of the total amount of the loan received as well as any additional fees.

Installment Loans
Installment loans are repaid over a specified period in fixed, equal amounts. It's a good option if cash flow is an issue and you need time to repay. The loan installment allows you to effectively manage the repayment process. It's also a great way to build your credit.

Advantages of Online Installment Loans

Many advantages will make you seriously consider an online installment loan, especially if you're in a financial crunch. Here are a few reasons why they can help you when you're strapped for cash.

Easy Application Process - It takes little to no effort to apply for an online installment loan. It's relatively easy with a fast decisioning process. Most importantly, you'll have access to the cash in a few days, if not sooner.

Convenience - You can shop around to find the installment loan that best suits your needs. Many online direct lenders now offer these types of loans with various options and loan terms. Because the service is provided online, you can shop, get pre-approved, and then compare them from the comfort of your home.

Competitive Rates - The number of lenders available also makes this type of loan offering quite competitive.

No Credit, No Problem - The online application process usually requires less information than a traditional loan. They also give borrowers with bad credit or no credit at all the opportunity to get a loan. This ensures that the decisioning process is not drawn out due to multiple requirements.

Installment Loans - Terms and Rates

Most installment loans have fixed rates with a set repayment or maturity date. They usually offer smaller loan amounts. Here's how Jora measures up.

Jora offers installment loans in various states. Their terms are governed by the rules of the state where the loan is originated. For first time borrowers, they offer loans ranging from $2,600 to $4,000 with APRs between 99% to 170%. Terms include loan installments up to 48 payments. They have flexible options and determine your eligibility based on:

  • An assessment of what you're able to afford
  • Your credit history
  • Your application information
  • The rates and terms in your state

If you opt to have your loan amount deposited directly to your account, once you're approved and you sign your agreement, depending on the time it's submitted, you can receive your funds the same day. If you opt to receive your loan via a check this will take longer.

Finding a Loan that Works

Unforeseen expenses are sometimes inevitable. There is no way to predict if your health will take an unexpected turn, if your car will stop working, or perhaps even worse, when a pandemic may occur.

Jora provides a flexible option and stands out from other direct installment loan lenders online. In some situations, you can receive the cash the same day you're approved. Our application and decisioning process is straightforward and quick. Apply today and we can help you meet your financial commitments especially the unexpected ones.

For more information on our loan costs and terms visit our What It Costs page.
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