In How Many Ways Installment Loan Is Favorable For You?
Many such situations occur where people need instant financial help to get rid of the problems. The reason behind trouble can vary from one person to another. Someone may face a recent job loss or met with some unexpected expenses such as a medical emergency. And not one in this world wants to stay in this period for a longer time.
People seek different methods to arrange money. And they prefer either borrowing from someone or choose a loan. If you are relying on someone (friends or relatives), then there is a probability that they will refuse your appeal. And now you have one option and that is ‘LOAN’.
There is one factor that resists people to apply for the loan and i.e. INTEREST RATE. People think that loan means disturbing the financial plan. But in a real scenario, many online lenders in the UK that provide different types of loan with flexible repayment time. And one among them is installment loan, you might be wondering that what makes this loan a unique and special.
Let’s understand what installment loan is and how it is different in the case of APR.
- What is the installment loan?
- What are the basic requirements to grab this loan?
- Where you can use the borrowing money?
- What are the examples of an instalment loan?
What is the installment loan?
In this type of loan, you have to repay the amount in the number of scheduled payments. In most cases, lenders set monthly repayment timing. In this, you have to repay the interest amount per month. This is the thing that makes this loan unique.
Unlike other loans where you have to clear-off the amount in lump-sum, installment loan provides your flexible timings. You do not have to put a strain on your budget plan to clear the debt. You can easily include this to your financial plan and repay the full amount without disturbing other financial aspects.
What are the basic requirements to grab this loan?
This is a loan that is available for both the short and long term. You can borrow money for three months to five years. But lending money for this period is a bit risky so lender put few conditions before you get the loan approval.
Let’s have a look at them…
Guarantor: If someone is ready to become your guarantee, then you can get a huge benefit from it. You will not only get the approval fast but can reduce your interest rate too.
Good credit score: If you have a less-than-perfect credit score, then you can rely on the above-mentioned method. But if you are one with a good credit history, then you do not have to worry about the sanction.
Security: Sometimes people with bad credit history fail to arrange a guarantor but they can get approval on the basis of collateral. If you can show some assets to the lender, then you can grab the money fast and on guarantee.
Where you can use the borrowing money?
There is no restriction over the usage of money. You can either use some personal expenses or surprising cost. Though, it would be better if you use the borrowed money for some useful purposes.
What are the examples of an instalment loan?
Auto loan: You can apply for this loan when you want to buy the car. Though, the payment period may change according to the borrowed money.
Mortgages loan: Want to buy a house but running out of the money? Well, you should choose a mortgage loan. You will not only get an affordable interest rate but flexible payment timing.
Personal loan: You can opt for this for various purposes it may be medical or educational. The terms may vary from 12 to 96 months. With a low-interest rate, you do not have to put any collateral or security.
You can notice that the installment loan is different from other types of loans. The best part is that it not only includes loan for a longer period but provide short term loanstoo. You can get various benefits from it. For instance, you follow a strict financial plan but one day you met with some surprise expense that may ruin your monthly budgeting. In that scenario, an installment loan can provide you the helping hand.
Make sure, you borrow money according to your needs. It should not happen that you apply for the loan for five years where you can solve the problem within a few months. So, choose the amount wisely.