Installment Loans: Benefits, Eligibility, and Pre-requisites
Installment loan companies have their terms and conditions spelled out in terms of penalties for lateness or missed payments, interest rate. Though installment loans approve short term duration of repayment, some still have penalties attached to it.
Some types of installment loans, such as auto loans and mortgages, are secured using collateral. Installment loans secured with personal properties (collateral), seem to attract lower interest rates when compared to unsecured installment loans.
What do we mean by the installment loan?
It is simply any money that a borrower receives in fixed amounts, in which repayment is expected in the same amount. The total payable amount usually is the principal amount, any additional fee deemed fit by the lender, and the interest rate. The term of the installment loan is that the borrower of the credits pays an equal amount of money weekly, bi-weekly, or monthly, as the case may be.
Typically, the amount given for an installment loan is more valuable, and the time frame given to pay back is longer when compared to a payday installment loan. Also, the interest rate charged on an installment loan is significantly higher than the one personal loan attracts.
Reasons for an installment loan
Mostly, people opt for an installment loan when they need to take care of sudden pressing needs or some specific projects. These are some of the best-known reasons for taking installment loans:
- Medical bills: Installment loan online can be used to settle those medical bills that are piled up, especially when your insurance coverage does not cover it.
- Enhancing your credit: If you want to take your creditworthiness to another level, an installment loan may be your best option, especially if you pay off that debt within the stipulated period. Credit improving loan should be applied in a bank within your region. A high loan requirement is not needed when applying for this purpose.
- Building or auto maintenance: You can also opt for an online installment loan when your car suddenly develops a mechanical fault, and you are low on cash for the repair.
- Long due utility bill: Taking an online installment loan is another option of paying for that overdue utility bill.
Benefits of installment loan
Most people switched to an online installment loan for different reasons. Here are some of the motives:
- The procedure for applying is easy: When you feel there is a need to apply for an installment loan online no credit check, you can do it conveniently from home. You pick up your phone or laptop and apply for any amount you deem necessary. It is quite easy and convenient.
- Speedy bankrolling: You can view the state of your loan immediately after sending your request. If the request has been approved, you can get the money in the bank account.
- They are not too strict with the requirements: Even with a negative credit rating, your request for an installment loan online can still be approved. They are not bent in carrying out strict credit queries, but you must prove that you can pay back the loan. Also, you can apply for an installment loan for bad credit, and it will be approved, but with the condition that you will pay a higher interest rate.
- No rigid fee: The place you reside, the amount applied for, and the lender you choose will likely affect the interest rate that you will be charged on loan.
Major requirements for an installment loan
Some basic things are needed to be eligible for a loan:
- Ability to repay: The creditor will need you to present proof of income. This is to show that you are capable of repaying the loan when given. You don’t necessarily need to have a big business or have several jobs to be eligible, just proof that you are not a liability.
- Means of identification: This is to indicate that you are not underage. This ID must be obtained from the Federal and not your private ID.
- An active account: This is very necessary as it the means through which you will receive your loan when it has been approved. If you don’t have an active account, then you can go to the branch closest to your region to collect your cash.
- Residential Address: You must reside in the country where you are considering applying for a loan.
Things to consider when comparing loans
- The amount: Some creditors may try to persuade you to borrow more money than you need just so that they can earn more interest. Though this is very common with creditors of payday installment loans as they are predatory. Don’t be lured into it; get what you originally planned tho borrow.
- Interest rate: Make sure you know the interest rate of the money you intend to borrow before accepting it. Some cunny lenders will not clearly state the interest rate. So be sure you know the interest to pay on loan.
- Fee: Find out if there are fees charged as some lenders mandates you to pay some fees like origination fee. Also, try to inquire if there are any other fees you need to pay after you receive the loan, such as paying extra fees for the late payment of an installment loan.
- Long terms: This is dependant on the amount of the credit, as the term for repayment varies ranging from few months to years. Also, the interest rate of the credits is affected by the terms of the loan. Long term installment loans attract smaller monthly installments, but in the long run, the borrower pays more because of the high-interest rate.
- Speed: When you apply for an installment loan online, you tend to get the money quickly, but remember that the interest rate is higher.
One of the things that attract borrowers to installment loans is the very easy and simple methods used in applying and accessing the loan. Various online installment loan lenders can easily give you a loan without hassle, even with the record of bad credit installment loans. Your loan can still be approved once you can meet up with the requirements needed. Therefore applying for the loan online is the easiest and fastest way to access money.