Your tooth doesn’t wait to ache until you have a healthy lump of savings to help with the dentist’s bill, nor does your car’s check engine light glow when you run into a little extra cash. These unexpected expenses usually arrive when you have zero savings and payday is still weeks away.
Many people in a similar tough financial situation turn to online installment loans for help, borrowing money to handle these unexpected dental and auto expenses. If approved, you may get access to money when needed, too.
But what about after the dust settles and it comes time to repay what you borrow? An online installment loan is only a financial solution if you can afford these payments.
To help you make an informed decision, here are three simple rules for borrowing an installment loan.
1) Comparison Shop
In an emergency, the pressure is on to find a loan fast, but don’t sign up for the first option you find. You could miss out on better opportunities by taking out a loan without researching all your options.
Research allows you to get a feel for what an installment loan will cost for a borrower like you, so you don’t want to rush this step. Take the time to review rates, terms, and conditions between several lenders to find the best option available to you today.
2) Look for Licensing
Another important feature to consider is a lender’s accreditation. You want to make sure a lender is licensed to lend in your home state.
When you’re shopping for an online loan, it can be tricky to remember that even online direct lenders are tied to a physical place. While they may not have a branch in your hometown, they’re still bound by state- and national lending laws.
Lenders can only offer legitimate loans in your state if they comply with your state’s regulations. They should proudly share their certification on their website. If they don’t, don’t apply with them.
3) Read Online Reviews
So far, everything in this guide can be found through your lender. You’ll find all the need-to-know details regarding rates, terms, conditions, and licensing on their website.
While a lender’s site is one of the most important resources to learn about your options, you have to realize it’s a very stylized and curated view of their offerings. Their site is mainly a marketing tool to highlight the best side of their loans.
To get a more balanced view of their financial products, you should read online reviews left by previous borrowers. Reviewers will share insights into what it’s like being a borrower regarding elements of the process not covered on the website. They can share their satisfaction or frustrations regarding the different steps of the borrowing process in ways that no lender can.
Do you know where you can find these reviews? Usually, you can simply type something like this into your favorite search engine: lender name + reviews. Alternatively, you can punch the financial institution into the following review platforms:
- Better Business Bureau
- Financer
- Sitejabber
- TrustPilot
The Takeaway:
Don’t apply for the first loan you come across, even in an emergency. You need some time to review the rates and terms, licensing, and online reviews to get a good idea of whether a loan (and lender) is the right option today.