Installment Loans are repaid in regular installments or payments, scheduled by you and your lender.
For each installment payment, the borrower repays a portion of the principal borrowed and also pays interest on the loan.
You will also receive your installment loan into your account in regular payments, differing from a traditional payday loan, which is usually paid into your account in one lump sum.
When Are Installment Loans Repaid?
Dime Alley’s lenders allow you, the borrower, to repay your loan over 1 to 60 months in regular payment installments.
Whether you want to borrow $600, $1000 or $2000, you can apply for an installment loan and organize your repayment plan with your lender to suit your needs.
For instance, if you know that your paycheck comes in on the 30th each month, you may want to organize to make your repayments on the 31st or 1st of the month, to ensure that you will have the funds necessary to make sure you can repay on-time and in full!
How Much Will My Installment Loan Cost?
Installment Loan Cost Breakdown
Let’s say you want to borrow $10,000 in installments with Dime Alley today over the course of 12 months (1 year).
To work-out the amount you will need to repay, we do the following;
$10,000 (the amount of the loan) x 0.06 (6% expressed as 0.06) / 12 (based on 12 monthly payments)
( 10,000 * 0.06 ) / 12 = 50
Therefore, for an installment loan of $10,000 to be paid-back with a 6% interest rate, your monthly payments would be $50 per month on top of the $10,000 you initially borrowed.
Can I Repay My Installment Loan Early?
Loans with installments can be for just a few weeks, or even several months – and Dime Alley gives you the option to choose how long you would like to borrow money for, whether it is 9 months, 18 months, 36 months or the maximum of 60 months (5 years).
You do always have the option to repay early if you would like, so if you find that after a couple of months or half way through the loan term that you would like to clear your account, you can certainly do so – and you will save money overall since less interest has accrued.
However, before asking to pay-off your installment loan early, bear in mind that a lender might charge you an early repayment fee, which can be around one to two months’ interest.
Can Early Repayment Help My Credit Score?
When you pay-off an installment loan, your credit report shows the account as closed. When calculating your credit score, FICO weighs open accounts more heavily than closed accounts. Open accounts are considered a measure of how you’re managing debt in the present as well as the past. Your successful payments on paid off loans are still part of your credit history, but they won’t have the same impact on your score.
When you added a personal loan to your credit history, you increased your number of active accounts and improved your credit mix with an installment loan. When you close the account, you will reverse the process: You will now have fewer open accounts and less account diversity. If you paid your loan off early, your history will reflect a shorter account relationship.
What Types of Installment Loans Are Available With Dime Alley?
Unsecured Installment Loans
This is where your loan is not secured against any property or collateral such as your car or your home (such as title loans).
Instead your eligibility is based on your income, employment and credit score and if you cannot repay, it will negatively impact your credit score, but you will not lose any valuable assets.
Secured Installment Loans
This is a loan repaid over several months or years which is secured against a valuable asset that you own, such as a car or home.
You will be able to borrow a percentage of the asset’s value (e.g 25%) and if you cannot repay, the lender may be able to stake a claim in the asset or repossess it.
Personal Installment Loan
For personal expenses and purchases including home improvements, buying a new car, debt consolidation, weddings, holidays, parties and more – this is for you as an individual borrower and not on behalf of your business or similar.
Can I Get An Installment Loan With Bad Credit?
Yes, Dime Alley can offer you an installment loan even if you have a bad or poor credit history. We also work with a number of lenders who only serve customers with poor credit or no credit at all.
Installment loans work perfectly for people with bad credit who may be trying to get their finances in order, since they can spread repayment over several months to maybe help pay off other debts and get back on their feet.
Dime Alley offers unsecured options, you may find that you have to use collateral or security in order to borrow larger amounts if you have adverse credit – since this allows you to leverage the value of your item to borrow money, although you may risk losing this if you cannot keep up with repayments.
You may find that the interest rates charged for people with poor credit could be a little higher to reflect the risk of default. Plus, you may find that the amount you can borrow may be a little less and the duration a little longer to give you more breathing space.