Sometimes, you may need an additional cash to pay for an urgent financial need. Although you think about getting an emergency loan during this financial crisis, you’re somehow hesitant because you may have trouble repaying what you’ll borrow within a short period of time. This is where applying for installment loans comes to the rescue. They can become a handy financial solution if you want to pay your loan in small, manageable portions.
Keep reading this article to learn more about installment loans and how they can benefit you.
What Are Installment Loans?
In simple terms, installment loans are specific amounts of money that should be repaid over a given period of time through monthly payments or installments. Generally, these loans require regular, fixed monthly payments, and they also come with a fixed interest rate. Also, when getting installment loans, a portion of the principal amount and of the interest rate will be applied to form part of the monthly repayments.
On the other hand, it’s important to know that instant installment loans from reliable online lenders come in different types. These can include:
- Personal Loans – These can be used for a variety of purposes, such as debt consolidation, home repairs, wedding, and many more. Also, personal loans are available in a wide range of amounts and come with flexible interest rates, depending on your credit.
- Auto Loans – These loans can be used to purchase a car. However, when you take out car loans, you have to use your vehicle as a collateral. This means that if you can no longer make repayments, the ownership of your car will be at risk.
- Student Loans – These loans, which are issued by private lenders or federal governments, can be used to fund higher education expenses. The interest rates, repayment terms, and many more differ depending on whether the loan is given by a private lender or the government.
- Mortgage Loans – These are popular installment loans that can be used to buy a house. Just like auto loans, applying for mortgage loans means using your newly-purchased home as a collateral to protect the lender in the event you can’t repay the funds
How Can Getting Installment Loans Benefit You?
Now that you’re familiar with what installment loans are, the next step is to understand the benefits of getting one for your financial needs. As mentioned, installment loans allow you to pay the borrowed money in small monthly repayments. However, there’s more to what these loans can offer.
Below are the benefits you can gain from taking out installment loans:
Simple And Quick Application Process
Getting a traditional loan isn’t the best financial solution for emergencies because the process usually takes a few weeks and may not be as straightforward as other types of loans. Thus, if you need instant cash, online installment loans can be a good way to go because of their simple and quick application process.
Since most installment loan providers are running their businesses online, it’ll only take you a few minutes to fill out the application form. Once you submit all the necessary documents, the lender will examine your application and give you a response within the day or the next. Also, when you apply for this type of loan, you don’t need to leave your home and wait in line because the whole process can be done from the comfort of your home.
Quick Approval Process
Apart from fast and simple application process, getting installment loans is also beneficial because of their quick approval process. Typically, loans that can be repaid through installments are processed within the fastest possible time. Once you’re approved, the lender will disburse the funds to your bank account as quickly as possible. This fast access to the loan proceeds allows you to cover an immediate expense without stressing yourself out.
Flexible And Manageable Repayment Terms
Compared to other types of loans, which should be paid in lump sum, installment loans come with flexible and manageable repayment terms. This means you can choose a longer-term payment schedule, making repayments more manageable and stress-free. By paying through installments, you can repay your loan without trouble, plus you can still have money left to fund your other monthly expenses. This can give you consistency and clarity to handle your finances efficiently.
Fixed Interest Rates
As mentioned, installment loans come with fixed interest rates, which means you don’t need to worry about paying higher repayments each month. With fixed interest rates in place, you’ll know how to calculate an installment loan payment that you should settle every pay period. This setup can help you manage your debts better.
Good Option Even For People With Bad Credit
If you have bad credit, taking out installment loans is still possible because there are lenders who don’t see your credit score as a primary factor to determine your eligibility for a loan. Even if you had financial issues in the past that affected your credit standing, you may still get approved for an installment loan, provided you can prove your ability to make repayments. This can be done by submitting some supporting documents, such as proof that you have a regular source of income and an active bank account.
Access To Higher Loan Amounts
Since installment loans have longer repayment terms, most lenders are also able to provide higher loan amounts. For example, taking out a higher loan amount can be sufficient to ensure cash flow between your pay dates. Moreover, getting a larger loan amount with a manageable repayment schedule can also lower the risk of applying for multiple loans just to fund another unforeseen expense.
With the information mentioned above, getting installment loans may be something that you should consider, especially if you have no savings to handle an emergency. However, before you apply for one, it’s important to do some research and find a licensed lender you can trust. Take the time to read the loan terms and conditions so you’ll know how to make educated financial decisions. That way, you can be sure you’re getting the most out of the benefits of taking installment loans for your needs.