The biggest installment loan most people ever take out in their lives is a mortgage, with some borrowers taking out loans worth millions of dollars. But mortgages are secured loans, and they’re tied to the value of a home.
If you’re looking for an answer about the biggest traditional installment loan that’s not secured, it’s not going to be even hundreds of thousands of dollars for most people. Find out more about installment loan options below.
What Are Installment Loans?
An installment loan is one which you agree to pay back over a certain period of time in fixed and periodic installments. Traditional installment loans have you making monthly payments, but some installment loans online offer terms where you pay smaller amounts every other week or twice a month.
How much you pay with an installment loan depends on how much you borrow, what the terms are and what interest rate you can get. The higher the interest rate, the more you’ll pay (assuming all other terms are the same).
Who Does Installment Loans?
Many types of lenders offer installment loans. You can get personal installment loans online or from banks and credit unions. Mortgage companies, student loan lenders and entities that finance car loans all provide installment loans.
How Big of a Loan Do You Need?
Before you start searching for the biggest installment loan online, make sure you understand what size loan you need. Typically, you’ll want to borrow the amount you need and little more than that in order to keep factors such as your credit utilization or debt-to-income ratio down. That can help position you for better financial options in the future.
The best way to understand how much money you need to borrow is to consider what you’ll be using the loan for. Here’s a breakdown of some common reasons people take out installment loans and how you can tell what you need.
- Secured loans for cars or other property. When taking out an installment loan for a vehicle, home or even a piece of furniture, you need a loan big enough to cover the purchase. The lender reviews your application and credit profile and decides how much it will lend in relation to the value of the property in question. It might require a down payment so that it’s not lending you the total value of the property (this is more common with mortgages and car loans).
- Installment loans to cover emergency expenses. Whether it’s an unplanned medical bill, a broken HVAC system or the need to replace the family computer, these types of installment loans are related to a specific cost. You can either get an exact quote or a decent estimate for these types of expenses so you know how much of a loan you need. If possible, you might want to get a loan for slightly over the expected amount in case there are extra expenses along the way.
- Installment loans to cover personal, non-emergency expenses. Perhaps you’re looking to fund a new furniture purchase. Or maybe you want to pay for a family vacation or need to cover living expenses until you can catch up over a few paydays due to unexpected strains on your budget. Sit down with paper and pencil and seriously consider how much you might need. Create a realistic budget for the expenses you want to cover with the loan. For example, if you’re covering travel, price flights and hotels, make a list of attractions you want to visit and ticket costs and build in some money for food, tips and anything else you might want to do.
- Online personal loans to build credit. If you’re looking for the best installment loans for poor credit to help build yours, then you may not be as worried about the amount. Instead, you’re looking to add an installment account to your credit mix and prove you can make on-time payments to potentially bring up your score. In this case, it’s important to ensure that the lender you work with will report your on-time payments to all three credit bureaus. Not all lenders do this, and if they don’t, you lose the credit-building value of the loan. It’s also critical that you make the payments on time so the lender doesn’t report late payments to the credit bureaus.
Factors in Qualifying for an Installment Loan
Once you know how much you need, the next question is about how much you will actually get approved for. Here are some of the factors that might be considered when you apply for a loan and can impact the biggest installment loan you can get:
The Lender’s Policies
Every lender has different policies regarding how much it will lend and to whom. Those policies might impact how much you can borrow regardless of need or factors such as your credit history.
For example, Wise Loan’s lending amounts can vary by state, but in general, individuals can get up to $2,000 for loans that are paid back in installments for up to 12 months. Check out the details for Wise Loan loans in your state:
Whether You Have Security
Depending on the type of loan you’re seeking and the lender’s policies, you might be able to get more funds if you have security to offer. For example, a lender is much more likely to fund a $20,000 loan on a new car than it is to simply give someone a $20,000 personal installment loan.
The reason for this is that the security protects the lender’s investment and mitigates some of the risk. If you don’t make payments on an auto loan, the lender can repossess the car and sell it. That lets them cover some of their losses.
Other examples of loans that are secured by real property or tangible goods are mortgages, home equity loans, or loans specifically for retail goods such as a television or couch.
Most of the best installment loans that are available online are unsecured loans, which might limit how much funding you can get. It can also drive up the interest rate because the lender needs to protect its investment.
Your Credit Score and History
Your credit score and credit history do sometimes play a role in loan eligibility. While Wise Loan offers installment loans for bad credit situations, not all lenders do. So, if you have poor credit, it could impact your ability to even get approved for a loan from some lenders.
If you do get approved, spotty payment history or other negative factors in your credit profile could limit the amount you’re approved for. Wise Loan does things a bit differently, though, and you can apply to find out how much you can get approved for.
Situational Factors Related to Personal Finance
Traditional lenders might also look at your debt-to-income ratio and income when deciding how much to lend you. Most lenders at least consider your income or want to ensure you can afford the payments on your installment loan. That’s because giving you a loan that’s more than you can afford simply sets you up for failure, and responsible lenders don’t want to do that.
Work With a Professional
Whether you’re looking for an installment loan for poor credit or need a loan to cover some emergency expenses, Wise Loan may be able to help. Working with a professional, responsible lender is always a good bet when you’re looking for online installment loans. Apply today!
The recommendations contained in this article are designed for informational purposes only. Essential Lending DBA Wise Loan does not guarantee the accuracy of the information provided in this article; is not responsible for any errors, omissions, or misrepresentations; and is not responsible for the consequences of any decisions or actions taken as a result of the information provided above.
