An installment loan is defined as a loan wherein a set number of scheduled payments is made in a specific given period of time. For instance, Jane needs to borrow $1,000 to pay for an emergency medical expense. Jane takes out an installment loan, needing paying the amount back within 24 months period at a 25% interest rate. Jane will need to pay $53.37 for a period of 24 months in an installment loan. What makes an installment loan different from a payday loan? Payday loans are usually offered for a shorter period of time with higher interest rate, and are often paid back as a single lump sum payment on the next payday of the borrower. On the other hand, an installment loan lasts for many months and payments are spread evenly over the term of the loan.
Installment loans is the best option for people without a credit history, for those who have bad credit or poor credit, in order to help to build a good credit history. Installment loans are requiring multiple payments, helping in creating a history of repayment. Installment loans can help in improving an individual’s credit score most especially if the borrower makes timely payments. Having a bad credit can really ruin your finance reputation most especially if you make business transactions, so dealing with an installment loan can help build and establish a good reputation. If you are needing extra funds that go beyond what cash advance can offer, one good solution is an installment loan. Installment loans are more flexible than other types of loans because the borrower can decide the amount to be borrowed and the length of time it can be paid back. A borrower can decide on a long-term loan with smaller payments or vice versa. Installment loans are not yet available in all states, with some states dictating the maximum and minimum loan amounts that can be borrowed in an installment loan.
Installment loans involve applicable fees and interest charges, and if the borrower is unable to make on-time payments, then any late fee must be notified to the borrower before application and collection. You need to make sure that if you are planning to get an installment loan, the lender should clearly express all fees and charges in a dollar amount as well as an APR or annual percentage rate as required by the U.S. law. Make your credit standing positive by getting an installment loan today, to help establish your good credit history, so talk to us now and we will help you out! We wills hed light to the facts and benefits of installment loans.