How do you handle a financial emergency when you’re short on funds and payday is still weeks away? For many people caught in this tough position, they turn to online installment loans.
Some installment loans can be a good option in an unexpected emergency, but only when the installment loan is an affordable addition to your budget. So, how can you make sure you’re getting something you can reasonably handle? Follow these simple dos and don’ts to help you narrow down the best option.
Do Comparison Shop
Signing up for the first loan you find may soothe your worries about how you’ll handle for your emergency, but there’s a big chance you’ll be settling for a solution that doesn’t fit your finances. You need to spend some time comparison shopping to ensure you get the best possible available to you today.
Check out lenders to see what they offer in terms of rates, terms, and conditions. Knowing the interest rate is important, but you’ll want to keep your eye on APR. As the annual percentage rate, it represents the total cost of borrowing, inclusive of interest, fees, and other charges.
Don’t Forget Your Location
When you do all the leg work online, it’s easy to forget that many online direct lenders are tied to a physical place. While they may not have a physical storefront, they’re still bound by lending laws.
Financial institutions can only offer loans in a state when they comply with that state’s regulations. If they aren’t certified by your state, then you can’t borrow money from them.
So, while you may be able to view the rates and terms of any installment loan online, you’ll only be able to borrow installment loans in Wisconsin if that’s where you live.
Do Read Online Reviews
So far, the previous two steps help you find info about your options that come directly from the lender. While a financial institution is an important resource for product details, they provide a curated glimpse into their processes. To get a better idea of how they treat their customers, you’ll want to read online reviews.
You can find them by typing your lender + reviews into a search engine, or you can check out these websites to see what past customers have to say:
- TrustPilot
- Financer
- Better Business Bureau
- Sitejabber
Don’t Ignore Privacy Policies
Anytime you take out a loan, you’ll have to share personal information with your lender. That includes confidential data like your contact details, financial accounts, credit score, and employment history. You don’t want this information to fall into the wrong hands, so you’ll want to ensure your lender protects it properly. Read the privacy or security policy to see how a lender collects, stores, shares, and disposes of your info.
Do Play with Your Budget
Your online installment loan payments may not naturally slot into your budget, but don’t let that discourage you. Take some time tweaking your expenses to free up more cash. You may be able to afford the cost of borrowing once you eliminate some of your discretionary spending.
If no amount of penny-pinching will help you cover the future cost of an installment loan, then it’s not for you. Only ever borrow money when you can juggle its rates and your usual bills.
Bottom Line
While online installment loans may give temporary relief in an unexpected emergency, you need to ensure the loan you pick fits your needs right now. Follow these dos and don’ts to help you find something that works.
