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.
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.
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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.