What Are Alternative Installment Loans?
Alternative installment loans are typically small, short-term installment loans that come with a high annual percentage rate. According to US News, these are often marketed for emergencies or fast access to cash.
What makes alternative installment loans different from regular personal loans is the approval requirements. Some lenders offer personal loans to borrowers in the fair credit range, somewhere between 670 to 739.
Meanwhile, alternative installment loans are designed for those with bad credit and may require a minimum score of 580 or less. For this type of installment loans, other financial factors may carry more weight.
There is an important downside to alternative installment loans, though: the cost. They may have significantly higher APRs and fees compared with conventional personal loans, as well as a low cap on how much it can be borrowed.
Jeff Zhou, co-founder and CEO of Fig Loans, cautions that not every alternative installment loan can be used to build credit. Loan activity reportage to the credit bureaus depends on the lender. At the same time, they can offer faster funding compared with other types of loans.
If you’re contemplating an alternative installment loan, keep on reading How Do Alternative Installment Loans Work?
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