Traditional Installment Loans: What They Are & How They Work

Traditional loans are a safe, affordable, and responsible option to obtain consumer credit.

About Traditional Installment Loans

• They are recognized by Pew Research Center as a safe and affordable financial product.
• They are an effective way for consumers to manage credit and build a positive pay history with the credit bureaus.
• They require underwriting to assess the borrower’s ability to repay a loan; calculating monthly net-income and expenses, to ensure proposed installment payments fit into the borrower’s budget.
• They have equal monthly payments of principal and interest and are at a fixed rate and term, giving the borrower a clear roadmap to repayment.
• There is no penalty for paying the loan off early.
• The borrower’s payment performance is typically reported to the credit bureaus, allowing borrowers the opportunity to establish new credit history and improve past credit history.

What are traditional installment loans?

Traditional installment loans allow borrowers to secure a specific amount of money and repay that money, with interest or fees, through a series of fixed monthly payments or installments. Typically, these loans have set terms and equal monthly payments and may be secured or unsecured. The size of the loan and the number of monthly payments will vary by state and by lender. Traditional installment loans may also be referred to as a personal loan or a consumer loan. They can be used for a variety of purposes, such as cash for a home or car repairs, school supplies, a new appliance, or a vacation.

Security Finance is licensed to offer traditional installment loans that vary in amount and terms based on the state where you live and apply for the loan. At Security Finance, our installment loans are designed to have equal whole dollar payments for a set number of months, typically 6 to 18 months. There are no balloon payments or prepayment penalties.

To apply for a loan, check for a branch convenient to your residence and apply in person or over the phone during business hours, or easily get started online now!

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How do traditional installment loans work?

First, start your application via one of the methods above. A team member at Security Finance may need to speak with you personally to complete the application process. The underwriting and loan decision process takes place during business hours, as shown on our website. Once you’ve been qualified for an installment loan, you’ll have a conversation with a Security Finance team member to review the terms of the loan and answer any questions to give you a clear understanding of the agreement. The next step, if the terms are acceptable, is to sign the loan contract and receive your funds. Your first monthly payment typically is due in 30 days, and each month thereafter until paid in full. Each payment or installment represents a portion of the principal amount borrowed, plus associated charges and fees as detailed in the loan contract.

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