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Business Loan Understanding Installment Loans in New Brockton, Alabama
When faced with financial emergency or expenses that exceed your budget, installment loans can come in handy. Installment loans are a popular lending option in Alabama, with many lenders offering them to residents in New Brockton and other cities.
Installment loans are a type of loan that allows the borrower to pay back the loan amount in regular payments over a set period of time, as opposed to paying the full amount on their next payday. In this article, we’ll discuss everything you need to know about installment loans in New Brockton, Alabama.
How Do Installment Loans Work?
Installment loans work similarly to personal loans, except that you pay them back in installments. The borrower agrees to a loan amount, interest rate, and repayment schedule. Each repayment includes a portion of the principal amount borrowed, as well as the interest accrued.
The repayment period for installment loans can range from a few months to several years. The exact timeline depends on the lender and the amount borrowed. Because installment loans come with a fixed payment plan, they’re a popular choice for those seeking predictable payments and manageable repayment terms.
Benefits of Installment Loans
One of the key benefits of installment loans is that they allow you to borrow more money than you could with a payday loan. Additionally, installment loans typically come with lower interest rates than credit cards, making them a more affordable option for borrowers.
Another advantage of installment loans is that they’re available to borrowers with a variety of credit scores. While some lenders might require a high credit score, others are willing to work with borrowers who have less-than-perfect credit.
Requirements to Qualify for Installment Loans
The requirements to qualify for an installment loan vary from lender to lender but generally include:
- Being at least 18 years old
- A verifiable source of income
- A checking account in good standing
- A valid email address and phone number
Some lenders might also require a minimum credit score or a certain debt-to-income ratio to qualify for an installment loan. Make sure to check with the lender before applying to ensure that you meet their requirements.
Interesting Facts About Installment Loans in New Brockton, Alabama
- Alabama has some of the highest per capita payday lending rates in the United States. Alabama residents are allowed to borrow up to $500 with a payday loan and up to $2,000 with an installment loan.
- In 2019, the Consumer Financial Protection Bureau (CFPB) proposed scrapping a rule that would have required payday and installment lenders to verify their borrowers’ ability to repay their loans. The rule would have provided consumers with greater protection against predatory lending practices.
- In 2020, Alabama enforced new regulations that required installment lenders to extend the minimum repayment period from 14 days to six months. The state also capped the interest rates that lenders could charge at 36% APR.
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