When people who do not have a strong credit history need to borrow money quickly for an emergency situation, they have a few options. One is to bring some valuable belongings to a pawn shop and use those items as collateral for a loan. Vehicle title loans also are available, but not everybody owns a vehicle outright. Another option is to obtain a short-term payday loan. A third possibility is a personal installment loan from a lender such as Maxlend Loans.
Problems With Pawn Loans
One problem with pawn loans is the borrower risks losing the item if he or she cannot at least pay the interest due on the date required, which typically is 30 days from the loan origination. Another problem is that the individual who needs an emergency loan may not have anything of enough value. A car repair might cost $600, for example. A third issue is that transactions nearly always must be done in person at a pawn shop. Many other types of personal loans can be completed online.
Advantages of Installment Loans
Installment loans can be quicker and easier to obtain because there is no need to make a trip to a brick-and-mortar business, or to wait while items are evaluated for a loan amount. The person must find a lender that operates in his or her state, as most of these companies do not make loans nationwide.
Most of the companies do not demand a high credit score, which is helpful for people who stumbled a bit with their credit in the past. The applications are straightforward rather than complicated and confusing. Some lenders require proof of income, such as copies of paystubs, direct deposit statements or a copy of a tax return.
Problems With Payday Loans
Payday loans can be obtained online as well, and these lenders also do not require good credit. However, the money must be paid back relatively quickly, which can be impossible for many people. What if the next paycheck is only $550 after taxes but the loan the borrower needs is $600? Installment loans allow the borrower to pay back the money over a longer time frame.