Sunday December 15, 2019
Home Business finance Common Mistak...

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

0
//
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

ALSO READ:Google Photos Now Adding Live Video Previews for Android Users

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. 

Next Story

India Grapples with Credit Issues

While the framework utilised by the rating agencies that has led to a delay in ratings relaying the correct credit information to market participants

0
India, Credit, Issues
Recent news whereby credit downgrades have just preceded defaults by Non-Banking Financial Companies (NBFCs) is a case in point. Pixabay

As India grapples with credit issues, one of the primary factors that needs analysis is the broken transmission mechanism that relays credit quality to market participants. In common parlance, the transmission mechanism that provides information regarding the credit quality of the borrower to the lenders is unable to do so efficiently. Recent news whereby credit downgrades have just preceded defaults by Non-Banking Financial Companies (NBFCs) is a case in point.

While the framework utilised by the rating agencies that has led to a delay in ratings relaying the correct credit information to market participants is partially to blame for the inefficacious credit transmission mechanism, issues around rating agencies are only part of the problem. For sure, rating agency regulations must be improved, but we must also realise that “credit market frameworks” are much more than ratings.

We must realise that credit ratings have limitations in terms of predicting credit cycle ups and downs. This phenomenon isn’t limited to just India but is a global feature. The inability of the credit rating mechanism to adequately price in and predict the credit cycle implies that a multi-pronged approach is needed to ensure that the credit quality transmission mechanism works effectively. Essentially, India needs to develop other features of the credit market that will assist market participants in gauging credit quality, thereby reducing the risk of a “jump-to-default” scenario we have witnessed repeatedly over the last 12 months.

Indian policymakers need to start working on a framework that will allow a liquid and deep secondary market to develop in credit products. Credit products here refers to the entire universe of lending, including bonds, loans and other instruments. Market pricing of products and risk and therefore increased participation by investors will help in “price discovery” of the credit quality. Constant pricing of credit risk and the concomitant information and structure that entails will imply that lenders will have a better information set with which to make informed credit decisions.

India, Credit, Issues
As India grapples with credit issues, one of the primary factors that needs analysis is the broken transmission mechanism that relays credit quality to market participants. In common parlance, the transmission mechanism that provides information regarding the credit quality of the borrower. Pixabay

A market that allows for secondary liquidity, albeit even small amounts to start with, will also incentivise borrowers to manage their credit profile better. More importantly, a secondary market for credit instruments will go a long way towards avoiding the bunching of credit as it happens in today’s market. A credit market has a cycle, and without the existence of a robust secondary market, in expansionary credit cycles, poor quality credit gets excessive access to capital. On the contrary, once the credit cycle contracts credit access for all businesses is diminished to a great extent.

We must work towards breaking the above trend that has plagued the Indian economy significantly. A secondary market for credit instruments will incentivise both lenders and borrowers to behave in a way such that the entire available pool of credit goes towards the most optimal usage.

Policymakers also need to start utilising vehicles similar to Real Estate Investment Trusts (REITs) or Infrastructure Investment Trusts (InvITs) to allow for the pooling of credit instruments. While debt mutual funds exist in the market, the aim of the new “credit pooling vehicles” will be to enable institutional investors to access credit instruments across the spectrum, and not just limited to certain corporate bonds. Access to vehicles that allow for greater liquidity and transparency will go a long way in increasing the capital availability and investor participation in Indian credit markets.

As India looks to boost economic growth, it is essential to realise the credit interlinkages in the economy. To boost exports, a primary aim in India, credit access will be a vital component, if not the most important. If credit is constrained by inefficiencies in the credit information transmission mechanism and therefore leads to inefficient lending in the real estate sector, then it is essential to realise that not only is the real estate sector severely affected but so are other areas such as exports. Primarily, an improved credit framework will lead to both higher availability of capital and credit availability at more affordable rates.

Also Read- Swedish Teen Climate Activist Urging Law Makers to “Listen to the Science” and Take Action

Credit markets, like all businesses, will move in cycles. Indian policymakers must aim to start building on the blocks that will allow credit downturns to be less severe and shorter. The ability to provide the market access to better information and investment structures will go a long way in improving credit pricing, and thereby credit access. (IANS)