Best Installment Loans

This article includes links which we may receive compensation for if you click, at no cost to you.

When it comes to getting a loan, there are three main choices: installment loans, payday loans, and credit card loans. If you’re suspicious of the latter two, your feelings are probably justified.

Although there are a few good deals and reputable suppliers out there, payday lenders are known for their predatory ways and exploitative rates. Likewise, credit card loans tend to have excessively high-interest rates.

A far better option is installment loans. When we think about loans, we’re typically referring to installment loans—loans that are paid monthly and on a fixed schedule. So, where can you find the best one for you?

What is the best installment loan?

There are a few factors to consider when you’re choosing an installment loan, but one of the primary considerations is your credit score.

After all, if you can’t even get approved for a loan in the first place, you’ll fall at the first hurdle. It’s therefore important for you to be realistic in your expectations and target a loan provider who lends to people within your credit score range.

We’ve broken down the best installment loans into the following categories:

Best for Poor Credit

(credit score below 600)

Best for Average Credit

(credit score of 600-640)

Best for Good Credit

(credit score of 650+)

What are the best installment loans for bad credit?

It may seem like the end of the world once you have bad credit, but the truth is there are plenty of loan providers out there who are still willing to give you an installment loan – but expect a higher interest rate.

Here are a few of the best bad credit loan specialists on the market; some of them don’t even have a minimum credit score requirement.

PersonalLoans.com

PersonalLoans.com is an online network that connects lenders with borrowers; it doesn’t directly provide loans. It also happens to be one of the largest networks in the USA, meaning there’s plenty of choice between lenders. They offer various types of loans, including personal installment loans.

For their installment loans, the minimum credit score is just 580, although this won’t guarantee you approval from every lender on the site. The only other eligibility criteria are basic criteria such as needing a checking account and proof of income – usually about $24,000 a year.

There is a wide APR range from 5.99% to 35.99%, and you can loan from $1,000 to $35,000. The terms go from 3 to 72 months. Whether or not you’ll face penalties for origination and late payments depends on the lender.

You can receive your funds within a day and use the loan for any purpose you see fit.

  • Minimum Credit Score: 580
  • APR: 5.99% – 35.99%
  • Loan Value: $1,000 – $35,000
  • Loan Term: 3 – 72 months

Avant

For those with a credit score slightly below average, Avant could be a good choice for an installment loan. They also boast a customer satisfaction score of 90% and a Better Business Bureau of A+, which are likely to be due to their vast customer support through phone, email, or messaging services on seven days a week.

The only requirement is to have a minimum credit score of 580 – there’s no limit on your salary, debt-to-income ratio, or credit history.

You can then take out a loan from $2,000 to $35,000 for a term of 24-60 months. The APR is 9.95% to 35.99%. There are also origination fees of 0.95% to 4.75%, but there’s no late payment or prepayment fee.

Avant loans aren’t available to those residing in the following states: Colorado, Iowa, Vermont, and West Virginia.

  • Minimum Credit Score: 580
  • APR: 9.95% – 35.99%
  • Loan Value: $2,000 – $35,000
  • Loan Term: 24 – 60 months

OneMain Financial

OneMain Financial is one of the most long-running lenders on the list, with a history spanning over 100 years. They also have an A+ rating from the Better Business Bureau, which shows their credibility.

Their main client base is bad credit lenders, and they focus on giving high-quality customer service to all of them. All potential borrowers need to meet an advisor in person before they’re given their funds. This may seem inconvenient for some as it can make the application process lengthier, but if you’re struggling with debt or your credit score, then it could also be an advantage. There are over 1,600 branches, so there’s sure to be one near you.

There are no requirements stated to receive a loan from OneMain Financial, which is partly because of their focus on personalized service rather than numbers. However, they still check typical factors like your credit score, credit history, income, and expenses – you may be asked to give collateral if your credit score is particularly poor.

You can take a loan of $5,000 to $100,000 for an APR from 18.00% to 35.99%; this is a high minimum APR due to the focus of OneMain on bad credit individuals. Terms range between 24 and 60 months, and there’s a co-signing option available, which could be a way of getting better loan terms.

  • Minimum Credit Score: none
  • APR: 18.00% – 35.99%
  • Loan Value: $5,000 – $100,000
  • Loan Term: 24 – 60 months

What are the best fair credit installment loans?

As you might expect, having a fair or average credit score means you have more options available – you’ll be able to access the majority of installment loans on the market, even those designed for individuals with excellent credit scores.

However, it’s recommended that you look for one best suited to customers exactly like you.

Prosper

You might have heard of peer-to-peer (P2P) – otherwise known as loan marketplaces. They connect borrowers with investors who want to make a return from lending. This process generally results in lower rates, since the investors are the ones carrying the risk, and there are fewer overheads.

Prosper was the very first peer-to-peer lender in the USA, having been founded back in 2005.

Their focus is on low-interest installment loans, which can be used for debt consolidation, personal loans, and home improvement lines of credit.

Take out a loan of $2,000 to $40,000 on a term of 36-60 months. The APR goes from 7.95% up to 35.99%. Unfortunately, you’ll face an origination fee of 2.41% to 5%, a late payments fee of $15 or 5% of the paid amount, and an insufficient funds penalty of $15. However, there’s no fee for paying your debt early, as is the case with most loans.

The terms are quite mid-of-the-range – you’ll need a minimum credit score of 640, minimum credit history of two years, and a maximum debt-to-income ratio of 50%.

You can receive funding within five days, which is slower than some other providers but still reasonably fast.

  • Minimum Credit Score: 640
  • APR: $7.95% – 35.99%
  • Loan Value: $2,000 – $40,000
  • Loan Term: 36 – 60 months

Upstart

Upstart is aimed at customers with average credit – but it’s a direct lender rather than a marketplace. Its main differentiating factor is that it offers a good chance for those who have a small yet strong credit history.

If you’re new to building up credit but show good potential for the future, (which could be demonstrated through a solid educational background or earning potential), Upstart will give you a fair rate. And, they claim you can save 23% by using an Upstart installment loan instead of a credit card loan.  Upstart could also be a great choice for qualified applicants looking to reduce their high-interest debt.

The minimum credit score to get approved is 620, alongside a minimum income of $12,000. Significantly, no minimum credit history is required, which is why these installment loans are so great for younger people. Finally, you can’t have a history of delinquency, any recent bankruptcies, or multiple recent inquiries on your credit score.

You could get a loan between $1,000 and $50,000 at an APR of 6.46% to 35.99% for a term of three to five years. You can expect fast funding – you may even receive your loan within one day.

The downsides are the fees and the lack of flexibility. There are origination fees of between 0% and 8%) and late fees of 5% of payment or $15 (whichever is greater). There’s no penalty for paying your loan early. There are also no secured loans or co-signing options available.

  • Minimum Credit Score: 620
  • APR: 6.46% – 35.99%
  • Loan Value: $1,000 – $50,000
  • Loan Term: 36 – 60 months

Best Egg

Best Egg provides unsecured personal installment loans in partnership with Cross River Bank and has a focus on convenience and customer satisfaction. They’ve won numerous awards, including an A+ rating from Better Business Bureau and a #1 Personal Loan Provider by Best Company.

Yet their loans are accessible to the average borrower – the minimum credit score is 640, and the rest of the terms are unspecified. However, most Best Egg customers have a debt-to-income ratio of less than 40% and a credit history of at least three years.

With an APR from 5.99% to 29.99%, you can take out a loan of $2,000 to $35,000. Meanwhile, loan terms go up to 60 months. However, there’s an origination fee of 0.99% to 4.99% of the loan amount and a late fee of $15.

You can receive your funds within one business day after completing a simple application process.

  • Minimum Credit Score: 640
  • APR: 5.99% – 29.99%
  • Loan Value: $2,000 – $35,000
  • Loan Term: up to 60 months

LendingClub

If your credit score is average, or above average, then LendingClub may be able to connect you with the right loan. As a peer-to-peer marketplace like Prosper, they connect borrowers with investors, who do the lending. LendingClub was another pioneer of this lending style, having started ten years ago, and is now the largest peer-to-peer lender in the USA.

The requirements are slightly stricter than the bad credit lenders, but still accessible to most people. To take out a loan with any lender on the platform, you’ll need a credit score of 600 or above, a minimum credit history of three years, and an income-to-debt ratio of less than 40%.

There’s some flexibility in the loans. You can choose to pay creditors directly and apply with a co-signer, which takes the credit score requirement down to 540 and the debt-to-income ratio down to 34% or less. Another possibility is applying with a joint applicant, which has the same effect on requirements. Finally, there’s a hardship plan available.

You can expect an APR between 6.95% and 35.89% – a range this large may seem unhelpful, but it’s because LendingClub doesn’t provide the loans itself, so the interest rates are at the discretion of the lender.

Loans are of a value between $1,000 and $40,000, while terms go between 36-60 months. Unfortunately, you’ll face some fees too. There’s an origination fee of 1% to 6% and a late fee of $15 or 5% of the payment after a 15-day grace period. However, there’s no prepayment penalty.

You can receive the funds within four days.

  • Minimum Credit Score: 600
  • APR: 6.95% – 35.89%
  • Loan Value: $1,000 – $40,000
  • Loan Term: 36 – 60 months

Upgrade

Upgrade is a direct lender to customers with an imperfect yet fairly average credit score. Their focus is towards those struggling with debt, rather than those who are still building their credit.

They specialize in the tools available to help customers with combatting debt. These include having the option to pay creditors directly and to access credit health tools and hardship plans. Co-signers are allowed too, which is a good way to lower requirements further.

Typically for a middle-of-the-range loan, the minimum credit score is 600. You must also have a minimum monthly free cash flow of at least $800, a minimum income of $30,000, and a maximum debt-to-income ratio of 60%.

You can loan between $1,000 to $35,000 at an APR of 6.98% to 35.89% for a term of three to five years. There’s an origination fee of 1.5% to 6% and a late payment fee of $10. You can receive the funds within just one day.

Upgrade loans are not available in the following states: Iowa, Vermont, and West Virginia.

  • Minimum Credit Score: 600
  • APR: 6.98% – 35.89%
  • Loan Value: $1,000 – $35,000
  • Loan Term: 36 – 60 months

What are the best good credit installment loans?

If you’ve found yourself in the ‘good’ or ‘above-average’ category when it comes to credit scores, then congratulations – you’ve put yourself in the best possible position for securing a good installment loan.

The higher above average your credit score is, the better your chance is of getting offered a loan with a low-interest rate.

LightStream

Lightstream offers loans aimed at giving low-interest terms to good credit borrowers. As is the case with Marcus, they’re the online division of a traditional bank; in this case, that bank is SunTrust Bank.

They offer impressively low-interest rates – the very lowest rates can only be achieved by using the AutoPay feature to automate payments; LightStream gives a 0.50% discount to all customers that use this feature.

Loans go from $5,000 to $100,000 for a term of 24-144 months (depending on loan purpose) – this is the longest term offered on this list, although, of course, a longer loan term will result in a higher interest rate. Like Marcus, Lightstream loans are free from fees.

As mentioned, the loans are designed for individuals with the best credit scores. You’ll need to have a credit score of at least 660 and will also be assessed based on your assets and income.

There are also some nice additional perks to taking out a loan with Lightstream. There’s the possibility of getting $100 if you’re not happy with your loan.

Lightstream personal loans

Marcus

Another established and reliable option is Marcus, an online offshoot of the major investment bank Goldman Sachs which focuses on lending.

The loan sizes range between $3,500 and $40,000, with an APR of 6.99% to 23.99%. Terms go from three to six years. These aren’t the best rates you can find as Goldman Sachs is a more traditional bank that has substantial overhead costs due to physical premises and staff.

The biggest advantage of taking out a loan with Marcus is that there are no fees involved – if you manage to make your payments for one year consecutively, then you’ll even be able to miss a payment for one month. The loan terms are also fairly flexible – you can directly pay creditors if you take out a debt consolidation loan – but there’s no opportunity to apply with a co-signer.

The minimum credit score requirement is 660. Approval can happen in just 24 hours, but it can take up to five days to receive the funds into your account.

  • Minimum Credit Score: 660
  • APR: 6.99% – 23.99%
  • Loan Value: $3,500 – $40,000
  • Loan Term: 36 – 72 months

Installment Loan FAQs

How do installment loans work?

Installment loans are designed for borrowing a set amount of money for you to pay on a frequent schedule – a personal loan is an example of an installment loan, but it’s not the only type. Mortgages and auto loans are also installment loans.

Installment loans are generally paid monthly at fixed rates. In contrast, credit card loans usually have variable interest rates and payday loans (small-value loans that give you money until your salary kicks in) involve weekly or even daily payments. Installment loans also generally have lower interest rates, so they’re preferable in most cases.

However, there can be some overlap between installment loans and payday loans. To avoid any confusion, check the loan you’re considering has a low APR and fixed payments over a period – rather than a higher APR and a single lump-sum payment – to ensure you’re getting an installment loan.

The application process and eligibility requirements for an installment loan are fairly similar to most other types of loans. Lenders will want to know about your credit score and credit history and decide on the conditions of your loan based primarily on this. Other factors are considered too, such as the term of the loan (shorter loans usually require lower interest rates).

Can I get an installment loan with poor credit?

Some lenders are specialists in bad credit borrowers – OneMain Financial, Avant, and PersonalLoans.com are all prime examples of this.

However, there are clear disadvantages to having a poor credit score. It means you’ll have less choice over which loan you take out and will most likely be forced to accept a higher rate than somebody with a more reliable financial history.

As well as the online lenders discussed in this article, if you’re a bad credit borrower, you could consider turning to a credit union or a local bank. These types of institutions often have social outreach programs and are willing to give fairer loans if you can prove in an in-person meeting that you’ll meet your payment obligations.

Can I get a loan with a 420 credit score?

A credit score of 420 is considerably below average, and will certainly restrict your options considerably. You may be forced to accept prohibitively high-interest rates.

If your credit score is this low, you should consider trying to improve your credit before applying for a loan – an online tool such as CreditKarma can provide guidance about how to do this. Nonetheless, if you really need a loan, there are definitely a few options available – just be aware of the consequences.

Is An Installment Loan for You?

Whatever you want a loan for, an installment loan is likely to be the best option for you. Fixed interest rates and reasonable APRs mean that the impact of taking out an installment loan is unlikely to be catastrophic for most people – they’re certainly preferable to payday or credit card loans almost all the time.

However, if your credit score is significantly below average, then you may be hit with some less-than-desirable interest rates.

Leave a Reply

Your email address will not be published. Required fields are marked *

In This Article