Many lenders offer installment loans online. They aren’t a new idea. However, some have evolved from complicated, restricted, time-consuming offerings to products with convenience, versatility, and affordability.

Before you decide to take out a loan, you should understand the process and what makes one loan better than another. Otherwise, you will pay more than you should or be stuck with one that has restrictions you may not have considered.

Let’s look at what you should look at when considering installment loans online and why FlexMoney is a great choice.

Installment Loans Online Application Process

You would think that applying for installment loans online would be a faster, simpler process. Unfortunately, that isn’t always the case with all lenders.

Some will ask you for the same information as a brick-and-mortar lender such as a bank or credit union. For instance, you may need to provide them with proof of income before you even know whether they will grant you credit.

Look for an online lender that only asks you for basic information. This should include your name, address, Social Insurance Number, cellphone number, and employment and banking information. The only time they might ask for proof of income is after you’re pre-approved. That brings us to the next point; pre-approval.

Why Pre-Approval is Important

What’s the difference between getting pre-approved or approved for installment loans online? One impacts your credit file, while the other doesn’t.

Companies that offer pre-approval do what is called a “soft” credit check. It does not appear on your credit file. If you choose a company that does not use this process, their “hard” inquiry will appear on your credit file, even if you don’t decide to move ahead with the loan.

Multiple inquiries on your credit file are a red flag to lenders as it makes it seem that creditors don’t want to lend to you. This can be extremely damaging and frustrating while shopping around for the best possible installment loans online.

What Criteria Do They Use?

Many lenders place the most emphasis on your credit score and your debt-to-income ratio. As a result, unless you have pristine credit and little or no debt, they won’t grant you a loan.

Others expect a long employment and banking history. This makes it impossible for anyone who’s changed jobs or moved recently to get a loan.

Luckily, some installment loans online use a more comprehensive approach. They examine your overall financial health and viability, instead of just these specific factors.

The great benefit of these installment loans online is they tend to have less stringent criteria. For instance, they will not have a minimum credit score requirement. They may also be more forgiving if you have one small indiscretion on your credit file such one late payment.

Additionally, they may only want to see three months of steady employment with the same employer and three months of banking history.

Do They Offer What You Need?

All too often, people squeeze their needs into whatever a lender offers. That’s not the way things should work.

Companies that offer personal installment loans online should offer the amount you want and a repayment schedule that suits your life. Regrettably, that isn’t always the case.

For instance, some lenders won’t even consider your application unless you borrow thousands, or tens of thousands of dollars. That’s fine if that is what you need, but if you only want $500 to tide you over?

Others won’t offer as much as you need. It is not unusual for installment loans online to have a maximum loan amount of $5,000 or $10,000, or even less.

Additionally, some lenders will only offer you a loan if you pay it off quickly. Once again, that’s fine if that suits your life, but what happens if you want affordable payments and more time to pay? If you want to be debt-free quickly, the lender should offer repayment terms as short as six months.

Do They Offer a Good Payment Schedule?

Installment loans online should also offer a payment schedule that aligns with your pay days and your financial goals. Many only offer monthly payments and that doesn’t necessarily work for everyone.

Check whether the lender offers a variety of repayment options including weekly, bi-weekly (every two weeks), semi-monthly (twice a month), or monthly payments.

Increasing payment frequency reduces the amount of interest paid. Many borrowers discover that paying each week doesn’t place an additional strain on their finances. It is just a matter of leaving the money in their bank account each month.

Also check whether the lender offers an online payment calculator. This is one of the best ways to juggle the payment amount with your life until you find a balance that works for you.

How Long Until They Notify You?

Most people apply for installment loans online, because they expect speed. However, some lenders will leave you hanging for days or weeks while they examine your application.

Look for a lender that will provide you with an answer within minutes. A good artificial intelligence program can assess your application in a flash. There’s absolutely no reason to wait days or weeks.

Do They Offer Competitive Interest Rates?

Installment loans online offer a wide range of interest rates and some are simply too high. Lenders can charge up to 60% interest on installment loans online, making it almost impossible to pay off the debt.

Unfortunately, desperate borrowers may accept loan terms, because they’ve been turned down through traditional lenders. Fortunately, some lenders offer very competitive interest rates.

If the lender offers pre-approval, you will see the interest rate offered. Then you can decide whether it’s the best possible loan for you, or not.

Shop around as much as you want, but always borrow from a reputable lender. They should offer good customer support online, via email, and on the phone. Look for good customer reviews too. They say a lot about how the company interacts with their clients.

Do They Charge Extra Fees?

When applying for installment loans online, check whether the lender charges an “origination fee” or a “prepayment penalty”. These are terms that disguise the fact that you’ll pay unnecessary fees.

Basically, an origination fee is a charge levied against you just for setting up an account. It is based on a percentage of the loan amount. Fees can range from 0.5% to 8.0%. Regardless, you shouldn’t have to pay it.

A prepayment penalty is also very common. Companies charge it if you pay extra payments or you pay your loan off in-full before the end of your installment loan term.

Why would a lender charge a prepayment penalty? They depend on a steady flow of interest from your loan. Consequently, they penalize to make up for lost interest if you interrupt that flow. Check the fine print carefully – you shouldn’t pay these penalties either.

How Quickly Do They Release Funds?

Installment loans online should be much faster than through a brick-and-mortar lender. If you find a loan you like and you’re approved, you should get your money quickly.

Once again, this isn’t always the case with online lenders. They may claim to be “fast”, but take days or weeks to release funds into your bank account. If you’ve got time to sit around and wait, that’s okay. However, many people need their loan money quickly to pay for an emergency, pick up a good deal, or just to get on with their life.

Look for an online lender that releases funds within 24 hours. Even though it may take slightly longer if you apply on a holiday or weekend, it won’t take many days or weeks.

The FlexMoney Way

FlexMoney stands above the competition for installment loans online. Here’s our checklist of requirements upfront for convenience to determine whether you want to apply:

  • Canadian citizen who is at least 20 years old.
  • Actively working with the same employer for at least three months.
  • Earning at least $2,000 per month in the last three months.
  • Have a mobile phone and email address.
  • Presently have an open and active bank account with a Canadian financial institution showing at least three months of transaction and banking history.
  • Borrowing between $500 and $15,000.
  • Want to repay within six months and five years.

Unfortunately, FlexMoney can’t guarantee 100% approval. Please do not apply if you are currently enrolled in an active bankruptcy, consumer proposal, or credit counselling program.

We can’t consider your application if your income is based on Employment Insurance, the Disability Tax Credit, and government benefits related to COVID-19 either.

Other than these restrictions, we invite you to apply. Please provide complete and accurate information in your application to avoid loan refusal.

If you agree with the interest rate and the terms, you can sign your loan documents digitally. Your personal loan money will be in your bank account within 24 hours.

FlexMoney lends throughout Canada and offers telephone, email, and online support. Visit our website for more information or to start the application process now.