top of page
Search

Think You Know Loans? 7 Myths About Online Installment Loans You Still Believe

  • steveshophia
  • Jun 9
  • 4 min read

Introduction

Let’s be honest—when you hear installment loans, what’s the first thing that comes to mind? For many, it’s a mix of confusion, suspicion, or maybe even fear. Why? Since a lot of false information is available. People talk, rumors spread, and myths take root.


If you've ever hesitated to apply for one of these loans because of something you heard, you’re not alone. But chances are, you’ve been misled by outdated or flat-out wrong beliefs. Let's settle the matter for good. 

This guide will walk you through 7 of the most common myths about online installment loans—and help you see what’s fact and what’s fiction.


What Are Installment Loans?

Think of an online installment loan as borrowing money that you pay back gradually, usually in equal monthly payments over a set period. It’s not a lump sum due all at once. It’s structured, predictable, and—best of all—accessible entirely online.


Unlike payday loans, which are due on your next paycheck, installment loans give you breathing room. You can use them for emergencies, bills, car repairs, or even medical expenses.


1: All Online Loans Are Payday Loans

Let’s set the record straight. Installment loans and payday loans are not the same thing.

  • Payday loans are short-term, usually due in two weeks, and come with sky-high interest.

  • Installment loans, on the other hand, are repaid on a monthly, bimonthly, or even quarterly basis in fixed amounts. 

If you’ve been scared off because you thought they were payday loans in disguise, you’re in for a pleasant surprise.


2: You Need Perfect Credit to Qualify

Wrong again. Many lenders today understand that not everyone has a perfect credit history. A lot of them work specifically with people who have:

  • Fair or poor credit

  • A history of late payments

  • Limited credit history

The key? Showing you can repay the loan. This could be through a steady job, consistent income, or a co-signer. It’s not about perfection; it’s about potential.


3: You Can Only Borrow Small Amounts

Many people assume installment loans are just for small emergencies. Not true.

Depending on your qualifications and the lender, you may be able to borrow as much as $10,000. These loans are often used for:

  • Debt consolidation

  • Major car repairs

  • Home improvements

  • Wedding expenses

The amount you’re approved for usually depends on your income, credit profile, and state regulations.


4: Repayment Terms Are Inflexible

One of the best parts of installment loans online is that you get to choose your repayment term.

Lenders usually offer terms from 6 months to 60 months. Want to pay it off faster and save on interest? Choose a shorter term. Need smaller monthly payments? Opt for a longer one.

Flexibility is built into the system—it’s like choosing your own adventure.


5: Applying Online Is Complicated and Takes Forever

This is one of the most outdated myths.

The truth? The majority of online applications are completed in under ten minutes. All you need is:

  • Proof of identity

  • Proof of income (like a pay stub)

  • A bank account

You can often get approved within hours and receive your funds as soon as the next business day. It’s faster than most in-person applications.


6. Benefits of Online Installment Loans

Let’s talk about the upside. Here’s what makes them so popular:

  • Convenience – Apply anytime, from anywhere.

  • Predictability – Fixed payments, no surprises.

  • Accessibility – Options available for all credit types.

  • Speed – Quick approval and fast funding.

  • Flexible use – No restrictions on what you can spend it on.

They’re like the Swiss Army knife of borrowing—simple, effective, and always ready when you need it.


7. How to Spot a Reputable Lender

Before you apply, do a little detective work. Here’s what to look for:

  • License – Must be authorized to lend in your state.

  • Transparency – Clear terms, no hidden fees.

  • Reviews – Positive customer feedback on trusted platforms.

  • Contact Info – A real address and working phone number.

  • Security – SSL encryption and secure site badges.


Who Can Benefit from Online Installment Loans?

They’re ideal for:

  • People with emergency expenses

  • Borrowers with fair or poor credit

  • Anyone who wants a longer repayment period

  • Those without access to traditional bank loans

Even if your bank turned you down, this could be your solution.


What to Avoid When Applying Online

Here are the red flags:

  • Lenders who ask for upfront fees

  • Guaranteed approval without checking anything

  • Unsecured websites

  • Pushy sales tactics

If it feels off, it probably is.


How to Apply for an Online Installment Loan

The process is straightforward:

  1. Choose a lender

  2. Fill out the online form

  3. Upload documents (if needed)

  4. Get Approved

  5. Review and accept the terms

  6. Receive your money

Done and dusted. No dressing up, no lines, no paperwork stacks.


What Happens After You’re Approved?

Once you’re approved:

  • Funds are deposited into your bank account, often within 24 hours.

  • Your repayment schedule begins, usually within 30 days.

  • You'll receive SMS or email reminders for impending payments.

If you continue to make your payments on time, you may eventually raise your credit score.

Conclusion: Rethinking Installment Loans

Many common myths about online installment loans simply aren’t true. These loans can be flexible, fast, and safe when you choose the right lender.

To find trusted options and compare rates easily, visit Bestratecheck and make confident financial decisions today.

 
 
 

Comments

bottom of page