It’s a type of loan that you pay back in equal parts, called installments, over a defined period of time. For example, if you borrowed $1,000 with a four-month repayment schedule, each month you would pay $250 + interest. As with other loans, you have to pay interest that accrues during each installment over the life of the loan, often monthly. You can learn more here.
What’s the Difference Between An Online Installment Loan And A Credit Card?
Borrowers need to make regular payments, usually every month, on their online installment loans, just like credit cards. However, there are two major differences:
- Available Credit
- Interest Rate
Available Credit: When you get an installment loan, you receive a fixed, lump sum of money. A credit card gives you a line of credit that you can draw on as you need it.
Interest Rate: Interest rates of installment loans are often fixed for the duration of the loan. Credit card interest rates can fluctuate based on things like, missed payments, changes in credit scores, etc.
What Are the Different Types of Installment Loans?
Below are several of the common title loans. There are others, like an auto title loan.
- Personal Loan
- Auto Loan
- Student Loan
Personal Loans: These are usually unsecured. Because of that, lenders must use your credit score to determine the terms of the loan. They will generally be less-favorable than if the loan was secured with some sort of collateral.
Mortgages: Mortgages are generally for large sums of money, the cost of a house for example. They are secured against the property the loan is being used to purchase.
Vehicle Loans: The lender will pay the full value of the vehicle up front. Then the borrower will pay them back, plus interest, over the life of the loan.
Student Loans: These are meant to help cover the costs of post-secondary education expenses. They can be used for things like, tuition, living expenses, books etc.
What happens if I can’t pay back my installment loan?
The first thing that can happen is that your credit score can be damaged. This can impact your ability to secure future financing for things like student loans, a house, a car, etc. If your payment is over 30 days late, your lender may report your delinquency to the three major credit bureaus, TransUnion, Equifax, and Experian. They may report it again after it becomes 60, 90, and 120 days overdue. What this means is that failing to repay a single loan can have a massive impact on your credit history.
It’s also possible that the lender will take the borrower to court to try and recover their money. This can result in an expensive legal battle. If the borrower loses, they will be forced to pay the original debt, their own legal fees, and possibly the legal fees of the lender. If they can’t pay, they may have to declare bankruptcy.
If the borrower secured the loan with collateral, like their house, the lender may repossess it if they fail to pay the loan. In this instance, the lender will likely sell it to recover their losses. Depending on the state laws, if there is money left over from the sale, after covering the original debt and the lender’s expenses, it may go back to the borrower, or stay with the lender.
How Much Money Can I Get for an Installment Loan?
That depends on the type of loan. For example, mortgages are intended to cover the cost of a home and can be for tens if not hundreds of thousands of dollars. Personal loans may be for only a few hundred dollars, enough to cover a smaller emergency expense. Generally, if you are securing your installment loan with collateral, like a car, you can borrow more money for a longer time at a better rate.
Can I Use My Car as Collateral For An Installment Loan?
Of course! If you own a car with a clear-and-free title in your name, you can use the title as collateral for an auto title loan.
Secured Installment Loans
LoanMart car title loans are known as secured installment loans. This means they are secured because of your vehicle title as collateral, and you can pay back your loan in installments, so your monthly payments can be manageable.
What’s an Online Title Loan?
An online title loan is a secured loan where your car title is used as collateral. You pay the interest and a portion of the principle each month over the life of the loan. Your loan is secured with collateral, meaning you may get a better interest rate than an unsecured loan. Because most title loan lenders are more concerned with the value of your car and ability to pay, there’s no lengthy loan application process. There are only a few things you need to get an auto title loan:
- Qualifying title for the vehicle, with your name on it
- Government-Issued I.D. (Driver’s License, State I.D., Passport, etc.)
- Proof of Residence (Certain pieces of mail)
- Photos of the front, back, and sides of vehicle
- Proof of Income
How Do I Get a Copy of My Vehicle’s Title?
You might be able to get a duplicate title through your local Department of Motor Vehicles (“DMV”). Some DMVs are capable of providing expedited titles. Depending on the circumstances, LoanMart might be able to help you acquire an expedited title from the DMV, or direct you to the nearest one that is able to assist you. Adding LoanMart as a lienholder at that time may speed up your loan process.
How to Get a Car Title Loan
One of the perks about LoanMart car title loans is that getting one is so easy! We have streamlined our process to benefit you. In some cases, people even get their funding in as little as one business day3! The process is as easy as:
- Give us some info
- Send us some documents
- Pick how you receive your money1!
All you have to do to get started is to go to the LoanMart homepage and fill out a quick information request. We’ll ask you for some basic info about your car, your home, and your financial history. It should only take about five minutes to complete the request and we can tell you practically instantly if you are approved.
After you have been approved, your LoanMart car title loan agent will contact you to discuss the rest of the process. You’ll get a free quote, some information about your LoanMart car title loan contract, and at this point you can decide if you feel comfortable and want to move forward. We don’t like pushy business people any more than you do, so LoanMart will never move forward with your title loan contract until you give us the go ahead.
The last step is to sign your contract and get your money1. For safe keeping, LoanMart will hold onto your vehicle title and sign onto it as a lienholder. But this is only for the duration of your loan period. As soon as your loan is paid off, you can get your title back.
Talk to your LoanMart representative and pick how you get your LoanMart title loan funding:
- Receive a check in the mail
- Have your money deposited directly into your bank account or online wallet
- Pick up your money at a participating money transfer location near you.
- Stop by our licensed location and get your money from us in person
You could be spending your LoanMart auto title loan money tomorrow3, so get started today!