Best Installment Loans In 2020
Installment loans are the formal name for a type of financial package that we all come across at some point in our lives. However, the chances are that you had no idea they were actually called that.
As the name suggests, an installment loan can be defined simply as a form of loan which we take out and then repay across an agreed term with a number of scheduled payments. Or, in other words, it is a loan that you pay off in installments.
Here we are going to provide a basic overview of the concept and also examine some of the key pros and cons of taking out such a loan.
Types of Installment Loans
Now that we have provided a basic summary of what installment loans are, you can probably think of a few examples of when you have made use of one.
The most common forms of short and long term installment loans you might have come across include:
Auto Loans
Auto loans often take the form of installment loans, as the packages allow you to purchase a dream car and then pay off the cost in regular amounts taken out of your bank account each month.
Mortgages
Like cars, buying a home can be a major purchase and mortgages make it easier to spread the cost across a period of years. As you pay a mortgage off in monthly repayments, it is another product which could be classed as an installment loan.
Personal Loans
Again, a personal loan can be used for all kinds of situations, whether you are making home improvements or need a wedding loan to hire a venue for nuptials. Paying for such issues via personal installment loans is much easier than having to pay outright.
Advantages of Installment loans
As the information above highlights, installment loans can undoubtedly be a useful tool for many households. But what are the absolute key advantages of making use of such financial products?
While the pros may vary depending on your personal situation, we think the following points are all worth bearing in mind.
Installment loans give you a chance to spread out a major cost, which removes short-term stresses about money and how you may fund certain purchases or activities.
- Interest rates are usually fixed on an installment loan, so you should not face any surprises when it comes to your monthly repayments.
- Installment loans are ideal when you are faced with unexpected issues and need to make major purchases to correct or resolve the situation at hand.
- Spreading the repayment of an installment loan across a long term can result in manageable payments.
- Applying for installment loans online is generally a fairly quick process that you can complete at whatever time suits you.
Disadvantages of Installment Loans
Of course, while installment loans can be hugely beneficial in many scenarios, some issues can arise with the financial packages. Here are just a few we can think of:
- Whether you are applying for installment loans online or in-person at a bank, the chances are you will not be allowed to make early repayments – or will at least be charged for doing so.
- Being locking into a fixed rate deal can be both a blessing and a curse. After all, a change in market conditions may mean you are paying over the odds when better deals become available.
- Installment loans tend to feature a range of terms and conditions and failing to meet some of them could have consequences.
When Should I Get An Installment Loan?
You can apply for installment loans whenever you like or, more specifically, when you feel you could benefit from the support that they provide.
Ideally, it would be best to increase your chances for approval by applying for one when you are in a good place in terms of your credit score. By doing this, you may have access to some of the best installment loans available at that specific time.
However, if your credit history is not looking too great, you may be able to apply for installment loans for bad credit.
Installment Loans With Bad Credit
While you may struggle to find guaranteed installment loans for bad credit or even online installment loans instant approval deals, there are options available if you need a loan but have a poor credit score.
A signature loan is just one example of a financial product that does not require collateral, while some providers may be willing to offer monthly installment loans for bad credit. However, it is well worth taking some time to do plenty of research as you try to find the best deals to suit your specific needs.
Finding installment loans for bad credit may not be straightforward, but it can be done.
