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Common Mistakes to Avoid While Applying for Installment Loans in Utah with Bad Credit

Getting an installment loan in Utah is not too difficult, and applying online helps you receive your funds even quicker

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installment loans
Installment loans are riskier for lenders because no collateral is involved with them, and less than perfect credit is accepted. Pixabay

Installment loans have emerged as a kind of personal loan that’s convenient for when you need cash quickly and don’t want to have to cut through all the red tape that most traditional personal loans come with. What’s great about them is they are a better alternative to payday loans because their payments can be broken up into smaller amounts payable over time instead of paying a lump sum all at once. But while they do have a lot of conveniences that come with them, they can have a few pitfalls that you should look out for. Before you deciding to apply for an installment loan in Utah, consider avoiding the following common mistakes.

Being Ignorant Of State Laws Regarding Installment Loans

Installment loans are less regulated and don’t have the same kind of borrowing laws around them that regular bank loans have, but they do still have laws that come with them to ensure they are being used in a responsible manner. Some states like Utah have some fairly well-defined laws regarding personal installment loans, but others you have to dig a little deeper to find. But finding out information such as licensing, advertisement regulations, loan term regulations and other information is important to making sure you’re dealing with a reputable lender. Usually looking up state codes in the legislative chapters online will give you the information surrounding installment loans in Utah with bad credit.

installment loans
Getting an installment loan in Utah is not too difficult, and applying online helps you receive your funds even quicker. Pixabay

Being Unaware Of Interest Rates And Finance Charges

Installment loans are riskier for lenders because no collateral is involved with them, and less than perfect credit is accepted. As a result, the interest rates and finance charges can become fairly high. The good news is unlike payday loans, you will usually be given a schedule of payments due upfront and you can plan for your payments that will come up with more time than you would payday loans. But you should always remember that installment loans are only meant to be used for a short-term expense that you plan to be financially ready to pay off, and they’re not intended to function like credit cards or auto loans.

Assuming You Can Get An Installment Loan Without A Credit Check

To be clear, some levels of less-than-good credit are acceptable with installment loans, and often the credit check that’s done is an alternative one that’s less picky than the one banks use. But it is still conducted because lenders need to ensure they’re not lending to a borrower who’s too likely to default or in very bad position to make payments. You should avoid any lender advertising an installment loan allowing approval with no credit checks at all because more than likely they are a scam artist. Always check the lender’s license, website page, and overall reviews especially if you’re applying online because installment loans in Utah with bad credit have sometimes been advertised by scam artists. If you need to verify that a lending company is legitimate, you can usually look them up in the state’s finance department registration directory.

installment loans
Installment loans have emerged as a kind of personal loan that’s convenient for when you need cash quickly and don’t want to have to cut through all the red tape that most traditional personal loans come with. Pixabay

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Getting an installment loan in Utah is not too difficult, and applying online helps you receive your funds even quicker. But you need to make sure you can verify the following with a government-issued photo ID, paycheck stubs, bank records or other documents the lender may ask for:

1. You are 18 or older

2. You are a legal US citizen or permanent resident, and a legal Utah resident as well

3. You are employed regularly and meet the monthly income requirements

4. You have an active bank checking account

If you meet these requirements, an installment loan may be just what you need. Keep exploring other areas of our blog to see more great home tips. 

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Applying for a Personal Loan? Don’t Make These 9 Mistakes

Most personal loans are unsecured, which means that lenders do not ask for security or collateral during loan approval

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Loan
Longer loan repayment period translates to lower equated monthly installments (EMIs). However, this also implies more money as interest payouts, thus, raising the cost of the loan taken. Pixabay

Personal loans may be sought for myriad reasons like funding a dream vacation, paying off sudden medical expenses, house restructuring, etc. And, getting a personal loan these days is not difficult considering several financial institutions are marketing their loan products at competitive rates. Moreover, the freedom to repay the loan by choosing a loan tenure suiting your requirements makes it even more attractive.  

Common Personal Loan Mistakes

You can apply for a personal loan online or go to the nearest branch of the lender to fill a loan application form for the loan amount. However, irrespective of the ease of getting personal loans approved and sanctioned, there are common mistakes that borrowers make while filling in their loan application forms. Some of them are:

  • Unsure about the loan amount: Easy availability of personal loans does not mean you can get a loan by filling out any random number as loan amount. You need to be aware of the loan amount you are eligible to get based on the eligibility criteria of the financial institution and the documents you can submit. Filling an amount that is higher than the amount you are eligible to can lead to application rejection of your application or higher personal loan interest rates.

 

  • Not comparing lenders: A lending institution may promise you a pre-approved loan within 15 minutes of the loan application. However, this must not be the sole cause of ignoring the interest rates and benefits offered by other lenders in the market. Comparing interest rates helps as you may gain from cheaper personal loans availed by others. A careful observation of your potential lender’s terms and conditions will ensure considerable savings.

 

  • Not taking care of your credit score: Most personal loans are unsecured, which means that lenders do not ask for security or collateral during loan approval. It explains why lenders are inclined to know your credit score. You must maintain a high credit score for quick loan approval apart from getting the loan approved at low-interest rates. 

 

  • Opting for prolonged loan tenure: Longer loan repayment period translates to lower equated monthly installments (EMIs). However, this also implies more money as interest payouts, thus, raising the cost of the loan taken. It is essential to adopt an aggressive approach when it comes to loan repayment to benefit from the lower burden of interest.

 

  • Ignoring excess charges: Many lenders charge extra under the guise of providing better online service or additional levy charges as management fees or processing fees. Check for the supplementary costs involved. Also, a potential high windfall in future means that you would like to prepay your loan. If the lending institution charges extra for foreclosure of the loan amount and if so, how much! 

 

  • Signing loan form blindly: Be it for a personal loan or any other purpose, it is essential to read the fine print. Many people sign the loan document without making sure of the loan details. The misconception that your lending institution can do no wrong can spell a substantial financial loss in the long run. 

 

  • Hiding Existing Loan Details: If you have taken another loan and are repaying it currently, it is vital to share details about the same. Withholding information about your current loans can adversely impact your credit history, thus, making it difficult for you to apply for loans in future.
Loans
Personal loans may be sought for myriad reasons like funding a dream vacation, paying off sudden medical expenses, house restructuring, etc. Pixabay
  • Withholding loan details with family members: Bearing responsibility is one thing and hiding the burden of loan from your loved ones is different. Before applying for a personal loan, you must discuss its details; including EMI payout information the loan interest payment each month may affect your family’s budget. 

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Apart from the above, rushing for a personal loan without checking the lender’s credentials may be risky. It happens in cases when fraudulent lenders announce nominal rates to entice new customers. It is beneficial to approach a lending institution you have a long-standing relationship and ask them for the prevalent personal loan interest rates to avoid financial hassles in the long run.