Installment loans are becoming an increasingly popular solution. Installment loans help people with unexpected expenses or various life needs, such as:
- Unexpected expenses
- Funds to plan a wedding
- Medical or dental bills
- Holiday gifts or travel
- Expenses from a new baby
- Home improvements or emergency house needs
- Debt consolidation
What Exactly is an Installment Loan?
Simply, an installment loan allows you to borrow once and then repay with regular, fixed payments (usually monthly payments that don’t increase or decrease) over a previously defined period of time. Installment loans provide a fixed interest rate and a set monthly payment that is based on the loan balance, interest rate and time you have to repay the loan. This means that with each payment you make, you reduce your original loan amount while also paying interest costs. Home mortgages and auto loans are two common types of installment loans.
Installment Loans versus Payday Loans
There is a difference in installment loans and payday loans. Unlike payday loans installment loans offer larger amounts of money and are also:
- Easier to refinance (based on a smaller principal and or for extended maturity)
- An option for long-term cash needs that need to be paid back in increments
Your FICO credit score is based on various factors of financial history:
- 35% Payment History – Repossessions, bankruptcy and late payments decrease this score.
- 30% Debt Burden – Current amounts owed, number of accounts with balances, amount paid down, etc.
- 15% Length of Credit History – Average age of accounts and age on oldest account.
- 10% Recent Credit Searches – A large number of credit inquires can decrease your score.
- 10% Types of Credit – Different types of credit used, such as revolving, mortgage, installment, consumer finance, etc.). A healthy mix of different types of debt tends to lead to higher credit scores because it suggests that you are an informed and responsible borrower.
Installment Loans: Choice of Lender Matters
In the heavily scrutinized financial market of today, it’s easy to find supporters and critics of installments loans. Advocates say installment loans are a better option compared to payday loans, since there is no final balloon payment that can cause the borrower to incur even more debt. Also, since installment loans can actually improve credit scores, they automatically gain better standing in the eyes of many financial professionals and consumer advocates.
However, there are also plenty of critics of installment loans and the companies that offer them. Unfortunately, predatory lending isn’t new to the financial industry, which is one more reason borrowers must carefully evaluate and select the lending institutions they choose to work with.
Our Approach to Installment Loans
With more than 370 loan offices in 10 states across the southeast, 1st Franklin Financial is a leading provider of installment loans. Unlike the faceless online lending institutions, 1st Franklin Financial has a history of being active in the communities we serve (primarily rural areas), which allows us to know and help generations of families. In fact, since 1941 our goal has remained this: to serve the financial needs of our friends and neighbors with the respect and personal service they deserve. Respect says a lot, and it’s what has driven the creation of our installment loan programs.
A few of the differences you’ll notice with an installment loan from 1st Franklin Financial are:
- Local involvement. Our relationship-based approach to lending demands that all decisions be made at a local level. That means that your loan officer will be a person you might see at your grocery store or little league game – not a faceless corporate decision maker hundreds of miles away. Our leaders feel that this level of personal connection enables us to make better lending decisions on installment loans.
- Transparency, speed and ease of securing a loan. Life is difficult enough sometimes; securing a loan doesn’t have to be. At 1st Franklin Financial, we work with you to make the process easy. There are no charges to get started and we can have your money to you in as little as 24 hours (excluding weekends).
- Predictable monthly payments that build credit. Our loans are not the same as a payday loan that is secured against your next check. 1st Franklin Financial’s installment loans – whether used for bills, necessities or to consolidate debt – allow you to save money and better organize your budget by:
- Allowing you to make a single monthly payment that fits your budget.
- Helping you reduce debt by paying down principal and not just interest.
- Enabling you to shrink debt faster than paying multiple individual accounts (when used for debt consolidation).
Apply For An Installment Loan
1st Franklin Financial makes the process of getting approved for an installment loan easy. Whether your have unexpected expenses or need a little extra help giving your family the Christmas you want them to have, we can help. When you’re ready to get started simply complete our online form and a local representative will contact you.
