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Best Installment Loans for October 2024

Best Installment Loans
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updated: September 11, 2024
edited by Wendy Connett

An installment loan can be either secured, such as an auto loan or a home mortgage, or unsecured, such as a personal loan, student loan, or credit card. The former use collateral, such as a car, a house, or jewelry, to guarantee the loan and are often used to pay for that collateral. The latter provide borrowers with a lump sum of cash that they can use for a variety of purchases or to pay off debt. Both must be repaid monthly over a predetermined period of time.

Here’s a look at some of the best installment loans from a variety of lenders.

Our recommendations for the best installment loans

best for Highly rated customer service
Upgrade

Upgrade

best for Highly rated customer service

Upgrade

APR
8.49% to 35.99%
Min. credit score
580
Loan amount
$1,000 to $50,000

If you’re looking for a lender with excellent consumer ratings, Upgrade qualifies. It has a 4.5 out of five stars rating on TrustPilot with more than 39,500 reviews. It’s also A+ accredited through the Better Business Bureau (BBB) with a 4.47 out of five stars rating.

As far as installment loans go, Upgrade offers from $1,000 to $50,000 with repayment terms ranging between 24 to 84 months. Funding can be as soon as the next business day, though it can take up to two weeks if you want your loan funds sent directly to your creditors.

Joint loans are accepted, as are unsecured and secured loan options. You can get preapproved online and check your rate in just minutes without affecting your credit score, but borrowers with a score of less than 600 may have trouble getting approved. Loans through Upgrade have an origination fee that can be as high as 9.99%, adding to your overall loan costs. Additionally, while the lower end of Upgrade’s annual percentage rates (APRs) can be very competitive, its upper end is the highest on our list, even higher than many credit cards.

Pros:

  • Get preapproved online without impacting your credit score.
  • Loans may be funded in just one business day.
  • Unsecured and secured loan options are available.

Cons:

  • An origination fee applies (can go as high as 9.99%).
  • Funding may take up to two weeks when paying creditors directly.
  • Interest rates are on the high side.
best for Low fees
Avant

Avant

best for Low fees

Avant

APR
9.95% to 35.99%
Min. credit score

600

Loan amount
$2,000 to $35,000

While Avant isn’t a no-fee lender, it does have a lower maximum loan fee than other lenders on this list. It also offers unsecured personal loans from $2,000 to $35,000 that can be funded as quickly as the next business day. Borrowers can check rates and get preapproved online without impacting their credit, and even those with fair credit can get approved.

However, the administrative fee can be as high as 4.75%, loan repayment terms are a bit limited, and the upper end APR is, like Upgrade, the highest on our list.

Pros:

  • Lower fees than many other lenders.
  • Funding by the next business day.
  • Check rates online without affecting your credit score.

Cons:

  • Administration fee of up to 4.75%.
  • Limited repayment terms.
  • Higher than average interest rates.
best for Flexible repayment terms
LightStream

LightStream

best for Flexible repayment terms

LightStream

APR
6.99% to 25.99%
Min. credit score

Good

Loan amount
$5,000 to $100,000

When taking out an installment loan, two of the most important factors are how much the monthly payment will be and the length of time it will take to pay the loan off. LightStream offers the most flexible loan repayment terms of any lender on this list, allowing you to choose a repayment period anywhere from 24 to 240 months. LightStream also has competitive interest rates and lets you borrow from $5,000 to $100,000 for almost any purpose.

There is no option for getting preapproved or checking your interest rates without causing a hard inquiry that may affect your credit score. Borrowers will also need good credit (or better) to qualify. LightStream won’t be the lender for you if you need a smaller amount than its minimum of $5,000. However, funding can be as fast as the same business day in many cases.

Pros:

  • Loan terms from two to 12 years.
  • Competitive interest rates.
  • High loan limits.

Cons:

  • Good to excellent credit required.
  • No preapproval or rate check option.
  • Loan minimum of $5,000.
best for No fees
Discover

Discover® Bank

best for No fees

Discover® Bank

APR
7.99% to 24.99%
Min. credit score
660
Loan amount
$2,500 to $40,000

If you don’t want to waste money on fees—such as origination fees, application fees, administrative fees, or even late fees—Discover should be on your short list, because it doesn’t have them. It does offer loans from $2,500 to $40,000 with competitive interest rates. Funding can come as quickly as the next business day, and repayment terms range from 36 to 84 months.

Discover doesn’t accept co-borrowers or cosigners, and while you can use its loan funds to consolidate existing debt, you can’t use them to pay off a current Discover credit card balance. Additionally, Discover doesn’t offer any online preapproval options if you want to check rates without affecting your credit.

Pros:

  • No origination, application, or administrative fees.
  • Wide range of repayment terms.
  • Funding as soon as the next business day.

Cons:

  • No preapproval or rate check option without a hard inquiry.
  • No joint loans allowed.
  • Cannot be used to pay off existing Discover credit card balances.
best for Consolidating debt
Happy Money

Happy Money

best for Consolidating debt

Happy Money

APR
11.72% to 17.99%
Min. credit score
640
Loan amount
$5,000 to $40,000

Happy Money is an installment loan marketplace that makes it easy to shop for the right loan, lender, and terms all in one place. You can find loans ranging from $5,000 to $40,000 with repayment terms of 24 to 60 months. Online preapproval is available, so you can check rates and terms without affecting your credit, loans are funded quickly, and the money can go directly to your existing creditors.

Happy Money makes it easy to consolidate debt. The downside is that’s all you can do with the money; no other purposes are allowed (unlike the other lenders on our list). All of Happy Money’s participating lenders charge origination fees, some may charge administration fees, and loans aren’t available in Massachusetts or Nevada at this time. Interest rates are competitive overall, but the lowest APRs are reserved for loans of $15,000 or less.

Pros:

  • Many different loan and lender options.
  • Fast approval and funding. 
  • Check rates without affecting your credit.

Cons:

  • Origination fees on loans from all lenders.
  • Can only be used to consolidate existing debt.
  • Best rates on smaller loans (under $15,000).
best for Quick funding
OneMain Financial

OneMain Financial Personal Loan

best for Quick funding

OneMain Financial Personal Loan

APR
18% to 35.99%
Min. credit score
Undisclosed
Loan amount
$1,500 to $20,000

If you need an installment loan funded fast, OneMain Financial can give you between $1,500 to $20,000 in as little as an hour. Repayment terms range from 34 to 60 months.

There are both secured and unsecured loan options, depending on your needs and qualifications.

OneMain Financial’s interest rates are as high or higher than the other lenders on our list, even greater than some credit card rates, while the $20,000 maximum loan limit is the lowest. Additionally, loans will be subject to an origination fee ranging from 1% to 10% of the total loan amount, which can mean hundreds or even thousands of extra dollars in loan costs.

Pros:

  • Funding as soon as one hour.
  • Secured and unsecured loan options.
  • Apply online, in person, or by phone.

Cons:

  • Highest interest rates on our list. 
  • Loan maximum of $20,000.
  • Origination fees of up to 10%.
best for Borrowers with low credit scores
PenFed

PenFed Credit Union

best for Borrowers with low credit scores

PenFed Credit Union

APR
7.99% to 17.99%
Min. credit score
580
Loan amount
Up to $50,000

PenFed Credit Union has installment loans of Up to $50,000 with a minimum credit score of only 580. However, you must become a member of the credit union to qualify. There are no origination or application fees, and you can check your rate and get preapproved online without impacting your credit. APRs are very competitive, starting at 7.99% and ending at just 17.99%, the lowest upper limit on our list.

However, PenFed loan terms only range from one to five years, shorter than the others on our list. Also, getting information about its loans is difficult, as it doesn’t publish much online, at least to nonmembers.

Pros:

  • No origination fees.
  • Borrowers accepted with credit scores as low as 580.
  • Online preapproval without affecting your credit.

Cons:

  • For members only.
  • Limited repayment terms.
  • Minimal loan information online.

Best installment loans compared

Best lenderAPRMin. credit scoreLoan amount
Upgrade
8.49% to 35.99%
580
$1,000 to $50,000
Avant
9.95% to 35.99%

600

$2,000 to $35,000
LightStream
6.99% to 25.99%

Good

$5,000 to $100,000
Discover® Bank
7.99% to 24.99%
660
$2,500 to $40,000
Happy Money
11.72% to 17.99%
640
$5,000 to $40,000
OneMain Financial Personal Loan
18% to 35.99%
Undisclosed
$1,500 to $20,000
PenFed Credit Union
7.99% to 17.99%
580
Up to $50,000

Methodology

To form our list we only looked at top-rated and well-known lenders, considering factors such as borrowing limits, interest rates, and repayment terms. We also looked at the ease of application, approval, and funding, as well as any limits on the use of the funding.

How to select the right installment loan lender

There are many different installment loan lenders from which to choose. Your specific needs will inform your selection. These include:

How much do you need to borrow?

If you only need to borrow $2,000, LightStream and Happy Money would be out, as they have a minimum limit of $5,000. On the other hand, if you’re tackling a big home improvement project and need $80,000, a lender such as LightStream, which has a maximum loan amount of $100,000, would be required.

How soon do you need the funds?

Are you borrowing money for an upcoming purchase or to consolidate existing debt, in which case you probably don’t need the cash immediately? Or are you facing an emergency expense that needs payment now, such as an unexpected medical bill? Some lenders offer funding as quickly as the same day, while others may take a few days (or even weeks) to get the cash to you. Choose accordingly.

What can you afford to pay monthly?

Your monthly payment is a factor of how much you borrowed, the interest rate you’re offered, and the loan’s repayment term. You should shop around to find the lowest interest rates and a repayment term that fits your needs. This could mean choosing a longer term to get a monthly payment that fits your budget.

Do you need a joint loan?

On our list only Upgrade, LightStream, and OneMain Financial allow joint or cosigned loans (or both). The former let you borrow funds with someone else who is equally responsible for the debt, such as a spouse. The latter make it easier to qualify for larger loan amounts, lower interest rates, and better repayment terms if your cosigner has better credit than you have.

Alternatives to installments loans

Not sure if an installment loan is really the best choice for you? Here are some alternative funding options to consider.

Credit card

If you have available credit on a credit card, you may be able to take out a cash advance or utilize a balance transfer instead of applying for an installment loan from a lender. A cash advance will give you funds that you can use for pretty much any purpose, while a balance transfer allows you to consolidate or repay existing debt balances.

It’s important to note that both cash advances and balance transfers are subject to additional fees and special interest rates, so they may cost more than an installment loan. Still, some credit cards have introductory 0% APR balance transfers for a certain period of time, allowing you to pay off debt with no additional interest as long as you do it before the rate changes.

Home equity line of credit (HELOC)

If you have at least partially paid off your mortgage, you have equity in your home. A home equity line of credit (HELOC) allows you to tap into that value with a revolving line of credit. You can pull from those funds as needed at any time during your draw period (usually 10 years). Whether you want to pay off existing debt, make a large purchase, or cover an unexpected expense, funds from a HELOC are available on demand.

More about installment loans

If you’re still not sure about an installment loan and whether it will meet your financial needs, here’s a little more about how it works.

What is an installment loan?

An installment loan is taken out to cover any number of purposes, such as paying off debt, covering a large purchase, funding a home improvement project, or paying for unexpected expenses. Unsecured loans don’t require the borrower to put up any form of collateral and often come with a fixed interest rate that won’t change over time. Secured loans require collateral, which the lender can take if the loan goes unpaid.

How do they work?

An installment loan is typically taken out in one lump sum, meaning you receive the full loan amount (minus any fees) up front. The debt is then paid back in installments, usually equal monthly payments, over a set period of time.

You can usually repay the debt ahead of schedule, though prepayment penalties may apply with certain lenders. If you need additional funds, you’ll have to take out another loan.

Pros and cons of installment loans

Pros:

  • May not need to be secured.
  • Lower interest rates than credit cards.
  • Available in a wide range of amounts and repayment periods.

Cons:

  • May include fees in addition to interest charges.
  • Stringent eligibility requirements for unsecured loans.
  • Possible long repayment terms.

Types of installment loans

While the most versatile type of installment loan is an unsecured personal loan, there are many other types that you might encounter. These include:

  • Home equity loans.
  • Auto loans.
  • Mortgage loans.
  • Buy now, pay later loans.
  • Student loans.

TIME Stamped: Installment loans can fund a variety of needs responsibly

An installment loan allows borrowers to take out one lump sum that they can use for almost any purpose, including to make a large purchase, consolidate and pay off debt, cover an emergency expense, or fund a big project. It’s repaid in equal monthly payments over a set number of years, at the interest rate and terms offered at the time the loan is disbursed.

It may or may not require collateral to secure it and can often be funded as quickly as the same or next business day. As long as you are careful to make sure you can afford the monthly repayment, an installment loan can be a responsible method of funding, especially for large-ticket items.

Frequently asked questions (FAQs)

How do I qualify for an installment loan?

You have to meet certain eligibility criteria, which may involve your age, citizenship status, location, income, debt-to-income (DTI) ratio, credit score, and more. These requirements will vary depending on how much you need to borrow and whether the loan will be secured or unsecured.

What happens if you pay off an installment loan early?

Paying off an installment loan early can free up your monthly budget while saving you money in interest charges over the life of the loan. However, some lenders may charge penalties for paying early, so it’s important to check that before committing to the loan.

How do you get an installment loan with bad credit?

Your credit score and history are important factors in qualifying for an installment loan. If you have bad credit, you may improve your chances of approval by asking for a smaller amount, choosing a shorter loan term, applying with a creditworthy co-borrower or cosigner, or securing the loan with collateral.

What’s the easiest installment loan to get approved for?

It’s easier to get approved for a secured installment loan than an unsecured one. It’s also easier to get a joint or cosigned loan (assuming you apply with someone who has good credit) than to get approved for a loan on your own, especially if you have a poor credit score or little to no credit history.

The information presented here is created by TIME Stamped and overseen by TIME editorial staff. To learn more, see our About Us page.

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