What exactly is an installment loan and how do you get one?
Question by Matt: What exactly is an installment loan and how do you get one?
I’m 18 and trying to build credit, and I’m looking to get an installment loan.
Would it be a type of loan where I would take out, say, $1000 and put up $1000 of my own as collateral? I know that I pay it off over a set amount of time at a set interest rate.
I’m just wondering if it’s the kind of loan where I would put something up as collateral or how does it work?
I already have a credit card.
Best answer:
Answer by Ed Atun
It is a legal term. Some loans for $1,000 have no payments. You just agree to pay back the money in 6 months.
An installment loan for $ 1,000 has monthly payments to repay the loan. You are paying in regular “installments”.
Either type of loan can have collateral. The lender decides if collateral is needed. Go to your bank and ask for a $500 loan. You will pay it back every month until it is paid off.
Give your answer to this question below!
Yes. An installment loan is a fixed amount borrowed with a fixed payment over a fixed period of time.
You don’t necessarily have to put up your own money as collateral, but it will make it easier to get the loan if your score is marginal.
There are ways you can get 800+ scores without ever paying a penny interest. I am proof.
Open a checking account – after 6 months in good standing ask them for a credit card – easy as pie.
You will need a job for 6 months – which I’m sure you already have.
If you are desperate for credit now, consider asking your local bank (where you have your checking) to offer you a secured card.
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