Installment loan remains one of the most popular types of investments among the others which are; payday loans, and business loans. Instalment loans are defined by the process by which a borrower gets a loan from a lender and reaches an agreement to pay a particular amount on a fixed date over a specified period. Its interest procurement also characterizes an installment loan. This type of loan has significantly helped to serve people for specific purposes. Some of the benefits are;
Any amount
An installment loan is accessible for no limitation. Whether you need a small amount of money to get an asset or you need a considerable amount of money for your business, installment loan does not discriminate and has you covered.
Fast approval
When you are in dire need of an installment loan, do not be dismayed because you can get it all done in little or no time. This is unlike getting bank loans where a lot of procedures are required before you can be granted the loan, it takes weeks sometimes if you are lobbying for a considerable amount of money.
Simple requirements
As long as you are of age and have been known to be a good citizen of the country, you can get your installment loan after filling just the necessary details.
Short term payment plan
This is more about how well you can be able to pay than anything. If you are capable of getting the loan settled within days, a payment strategy can be designed to suit your pocket. Some other loans that are not flexible in their payment terms take a very long time to pay up. As you linger, interest increases, and you end up paying more interest than the actual loan.
Freedom
An installment loan is what it is- pay in installment. The lender is less concerned about what your money is used for. If you were going for a mortgage or car loan, you should be prepared only to use the money for your car or your home. An installment loan is unlike these two; it allows you the spending freedom.
Great for emergencies
Life as we know it cannot be predicted- things come up that we do not have planned out. People get sick; cars break down, homes collapse. As much as we do not wish these things upon ourselves, they are just some of the possibilities as long as we are alive and part of a community. When these things happen, installment loans can be a saving grace for the meantime. On the other hand, installment loans do not have to be obtained only for emergencies. It could as well be useful for a precedent project. Whatever the case may be, an installment loan is your go-to savior, do not ditch! There are also few flaws that have been found inherent with procuring installment loans. These disadvantages are found pronounced in the following;
Long term commitment
An installment loan can be very tricky that you may find yourself still paying the mortgage of the thing you obtained after you must have discarded it. This often happens when you do not earn a considerable amount. Because installment loans will give you a fixed amount based on what you receive, you may have to pay for an extended period. Let us assume you got a car with the money; you have been asked to pay up within five years. A vehicle can stop working even before five years and leave you still committed to paying up the debt.
Interest rate
One of the significant things to consider when going for an installment loan is the interest it carries, not because you may not be able to handle it but more because the interest rates often fluctuate. Anytime the interest rate changes, it affects the prime rate. It also has a way of affecting the interest rate that banks short term creditworthy borrowers.
Payment
An installment loan is also characterized by larger monthly payment compared to other types of debt. There is a need to pay for the interest and first-rate every month. These are some of the things to put into consideration before a decision is made about procuring installment loan.