Best installment loans of July 2024
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 11:01 a.m. UTC July 8, 2024
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There are many types of installment loans. With a personal installment loan, you get a lump sum upfront and pay it back in fixed monthly amounts. Typically, personal loans are paid over one to seven years, and you can borrow up to $100,000.
Before you decide on a personal loan, it’s important to compare your options. We’ve found the best installment loans of 2024 to help keep things simple.
Best installment loans
- SoFi: Best for large loan amounts.
- Upgrade: Best for building credit.
- LendingPoint: Best for fair credit.
- LightStream: Best for fast funding.
- Prosper: Best for peer-to-peer lending.
- Discover: Best for good credit.
- Universal Credit: Best for co-borrowers.
- Avant: Best for customer support.
- Axos Bank: Best for excellent credit.
- U.S. Bank: Best for repayment term variety.
- TD Bank: Best for in-person service.
Why trust our personal loan experts
Our team of experts evaluated hundreds of personal loan products and analyzed thousands of data points to help you find the best fit for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 40 personal loan lenders reviewed.
- 640 data points analyzed.
- 6-stage fact-checking process.
Our top picks for installment loans in 2024
Discover
Compare the best installment loans
| INTEREST RATES | LOAN AMOUNTS | LOAN TERMS (YEARS) | MIN. CREDIT SCORE | |
|---|---|---|---|---|
SoFi
| 8.99% to 29.49%
| $5,000 to $100,000
| 2 to 7 years
| 680 |
LendingPoint
| 7.99% to 35.99%
| $2,000 to $36,500
| 2 to 6 years
| 600 |
Upgrade
| 8.49% to 35.99%
| $1,000 to $50,000
| 2 to 7 years
| No minimum
|
Prosper
| 8.99% to 35.99%
| $2,000 to $50,000
| [loan_product_loan_terms pid=215543]
| 560
|
LightStream
| 6.99% to 25.99%
| $5,000 to $100,000
| 2 to 12 years (depending on loan type)
| Does not disclose
|
Discover
| 7.99% to 24.99%
| $2,500 to $40,000
| [loan_product_loan_terms pid=215576]
| 660
|
Universal Credit
| 11.69% to 35.99%
| $1,000 to $50,000
| [loan_product_loan_terms pid=215555]
| 620
|
Avant
| 9.95% to 35.99%
| $2,000 to $35,000
| [loan_product_loan_terms pid=215579]
| 580
|
Axos Bank
| 11.79% to 20.84%
| $7,000 to $50,000
| [loan_product_loan_terms pid=215567]
| 730
|
U.S. Bank
| 8.74% to 24.99%
| $1,000 to $50,000 ($25,000 maximum for non-U.S. Bank customers)
| 1 to 7 years (5-year maximum for non-U.S. Bank customers)
| Does not disclose
|
TD Bank
| 8.99% to 23.99%
| $2,000 to $50,000
| 3 to 5 years
| Does not disclose
|
All rates include discounts where noted by the lender and are accurate as of July 8, 2024.
Methodology
Our expert writers and editors have reviewed and researched multiple lenders to help you find the best installment loan lenders. Out of all the lenders considered, the six that made our list excelled in areas across the following categories (with weightings):
- Loan details: 20%
- Loan cost: 35%
- Eligibility and accessibility: 20%
- Customer service: 15%
- Ease of application: 10%
Within each major category, we considered several characteristics, including APR ranges, loan amounts, maximum repayment terms, lender discounts, late payment and prepayment penalties, minimum credit score requirements and funding time as well as co-signer or co-borrower acceptance. We also evaluated each provider’s customer support options and customer reviews.
What is an installment loan?
An installment loan is a kind of loan that provides you with a lump sum upfront to use how you’d like. After receiving your funds, you pay back the loan through regular installments over time — often on a monthly basis.
Installment loans (also known as installment credit) have a fixed payoff date and only allow you to borrow once. If you need more funds, you’ll have to take out another installment loan. This contrasts with revolving credit like credit cards and home equity lines of credit (HELOCs), which have no fixed end date for full repayment and allow for repeat borrowing.
Types of installment loans
Many common loans are considered installment loans since you pay them off in regular installments over a certain period of time. Some common types of installment loans include:
- Personal loans: These loans can be used for almost any purpose and can range up to $100,000, depending on the lender. You’ll typically have one to seven years to pay off a personal loan. Most personal loans are unsecured, meaning they don’t require collateral, and are provided by online lenders, banks and credit unions.
- Student loans: These can help you cover the costs of college, graduate school or career school. They often come with a grace period while you’re in school and require monthly payments afterward. Federal student loan repayment options can range from 10 to 30 years, while private student loan terms typically span five to 25 years, depending on the lender.
- Auto loans: This type of installment loan uses a car as collateral. Because there’s less risk for the lender, an auto loan can have a lower rate than a personal loan — but you can lose your vehicle if you don’t make your payments.
- Mortgages: If you want to buy a home, you’ll likely take out a mortgage to finance the cost. Interest rates can be fixed or adjustable, and loan terms often extend over 15 or 30 years.
- BNPL: Buy now, pay later (BNPL) loans are sometimes offered at checkout when you’re making an expensive purchase. These loans let you spread out the cost over several weeks, months or years, depending on the repayment term you choose.
Looking for an unsecured installment loan? Compare the best unsecured personal loans
Comparing the best installment loans
Before choosing an installment loan, it’s important to shop around and compare your options with as many lenders as possible to find the right loan for you. Here are some important factors to consider as you do your research:
- Interest rates: Your interest rate plays a big role in how much you’ll pay for your loan — the lower your rate, the less you’ll pay.
- Repayment terms: Your repayment term directly impacts your monthly payments and overall interest charges. Choosing the shortest term you can afford can help you not only pay off your debt faster but also keep your interest costs lower.
- Fees: Several lenders charge fees on installment loans that can raise your borrowing expenses. Some common fees to look out for include origination fees, late payment fees and returned payment fees.
- Eligibility criteria: Most lenders require good to excellent credit, sufficient income and a low debt-to-income (DTI) ratio to qualify for a personal installment loan. There are also some loans with more flexible qualifications, but these can have higher rates and more fees to offset the risk for the lender.
Tip: Use our personal loan calculator to see how much a personal installment loan will cost you with different rates and terms.
Installment loans for bad credit
Having bad credit can make it more challenging to qualify for an installment loan, but that doesn’t mean you’re out of options. Some lenders cater to borrowers with poor and fair credit, and they have more flexible borrowing requirements compared to other lenders.
However, bad credit installment loans tend to have higher rates and fees than those reserved for borrowers with good credit. Personal installment loan rates can go as high as 36%, and an origination fee might go up to 12% of your loan amount, depending on the lender.
Struggling to qualify? If you’re having trouble qualifying for a loan, you might improve your chances by applying with a co-signer or joint applicant who has good credit. Note that a co-signer is liable for repayment if you (the primary borrower) don’t make your payments, while a co-borrower is equally responsible for the loan from the start.
You might also have an easier time getting approved if you apply for a secured loan and provide collateral, such as your car or savings. The risk, however, is that you could lose your property if you default on the loan.
Pros and cons of installment loans
An installment loan can be beneficial if you need to cover expenses — like a large purchase or debt consolidation — and want to make predictable monthly payments over a set period of time. On the other hand, taking out an installment loan means taking on more debt as well as paying interest and possibly fees.
Here are some pros and cons to keep in mind before borrowing:
| PROS | CONS |
|---|---|
Can have competitive interest rates that are lower than credit card rates
| Can come with fees (like origination fees or late fees)
|
Fast funding
| Maximum rates can be high if you don’t have good credit
|
Predictable payments with fixed rate
| Borrowing requirements can be strict (depending on the lender)
|
Can help you build credit and won’t affect your credit utilization
| Missed payments are reported to the credit bureaus and will damage your credit
|
How to get an installment loan
If you’re looking to get a personal installment loan, follow these steps:
- Check your credit. Your credit will influence both your chances of approval for a personal loan and the rate you get. So it’s a good idea to review your credit report and check your credit score before you apply.
- Compare lenders and pick a lender. Be sure to shop around and compare your options with as many lenders as you can to find a good deal. Many lenders let you get pre-qualified with only a soft credit check, which won’t harm your credit. After doing your research, choose the lender you prefer.
- Submit your application. Once you’ve picked a lender, you’ll need to submit a full application and provide any required documentation, such as pay stubs and ID.
- Get your funds. If you’re approved, you’ll sign for the loan so the funds can be disbursed to you. Some lenders can fund your loan as soon as the same day or next day after approving your application.
Where to get an installment loan
You can get a personal installment loan from an online lender, bank or credit union. Taking out personal installment loans online is often the fastest option application- and funding-wise, while working with a traditional bank or credit union can sometimes take longer.
Be ready before you apply: 7 personal loan requirements and how to qualify
Alternatives to an installment loan
An installment loan isn’t necessarily your only financing option. Here are a few alternatives you might consider if an installment loan doesn’t seem right for you:
- Credit card: A credit card lets you borrow on an as-needed basis, which can be helpful if you don’t know much you need to borrow or have recurring expenses. Some cards even come with a 0% annual percentage rate (APR) promotional period, which means you can avoid interest if you pay off your card before it ends. But if you can’t repay your balance, you can end up with high interest charges — and remember that credit cards usually have higher rates than personal loans.
- Personal line of credit: Similar to a credit card, a line of credit is a revolving credit line that you can draw on as needed and pay back as you go. Plus, you’ll only pay interest on the amount you borrow.
- Home equity loan: If you’re a homeowner, you could draw on your equity with a home equity loan. Like a personal loan, this gives you a lump sum to use how you’d like. Because the loan is secured by your home, you’ll likely get a lower rate than you would on a personal loan. But this also means you could lose your home if you don’t keep up with your payments.
- HELOC: Another way to tap into a home’s equity is with a HELOC. This type of financing is a flexible credit line that you can borrow from on an as-needed basis. Like a home equity loan, a HELOC uses your house as collateral — so you risk foreclosure if you can’t pay back what you borrow.
Frequently asked questions (FAQs)
Installment loans come with flexible repayment terms that often span anywhere from one to seven years. Payday loans, on the other hand, typically require you to pay your loan back in full with your next paycheck. Plus, payday loans typically come with much higher interest rates and fees than installment loans, with APRs that can soar to 400% or higher. Installment loans typically have much more reasonable APRs starting around 6% and maxing out at 36%.
Installment loans can be secured or unsecured. Almost any loan that you pay back with monthly installments can be considered an installment loan, including personal loans, student loans, auto loans and mortgages. The lenders on this list, however, primarily offer unsecured personal installment loans that don’t require collateral.
Peer-to-peer (P2P) lending involves individual investors or businesses offering loans to borrowers. If you borrow a P2P loan, you’ll borrow from an individual investor rather than a traditional bank or online lender. P2P loans may have more flexible credit requirements than traditional installment loans.
“If the borrower has a fair credit score or short credit history, peer-to-peer or P2P lending can be a go-to option, as the borrower may have an easier time getting approved in comparison to a personal loan from a traditional bank,” says Ohan Kayikchyan, certified financial planner (CFP).
However, P2P loans may come with higher interest rates and a lengthier application process than a traditional personal loan. That’s why it’s still a good idea to compare offers from multiple lenders.
It can be challenging to qualify for a personal installment loan with bad credit, but some lenders have more flexible borrowing requirements than others. Some lenders also let you apply with a co-signer or co-applicant, which could boost your chances of approval—but this also means your co-applicant will be liable for repayment, as well.
Personal installment loans can be used for a wide variety of purposes, including home improvements, debt consolidation, medical bills, wedding expenses, travel and more. However, you typically can’t use a personal loan for higher education expenses, investing or a down payment for a home.
An installment loan can help or hurt your credit, depending on how you pay it back. Making all of your loan payments on time can help you build a positive payment history and boost your credit over time. Plus, taking out an installment loan could add to your credit mix, which makes up 10% of your FICO score.
On the other hand, missing payments on your installment loan will damage your credit score. Late payments can stay on a credit report for seven years.
Some of the most common installment loans are personal loans, mortgages, auto loans and student loans. BNPL loans — a type of point-of-sale financing — have also become more popular in recent years.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
