When you have a sudden cash crunch, an installment loan allows you to borrow a limited amount of money at once. Then, you can repay it over a fixed number of installments.
Typically, installment loans have pre-set repayment models, and it means that the amount doesn’t change over the term. Before applying, you must decide how much money you need to tide over the tough times. Though payments are made every month, the schedule can vary.
Here are some examples of instant funding for installment loans.
Auto loans – These are generally repaid over monthly installments over a range of 12 to 96 months. Loans that come with longer terms have lesser monthly payments and higher interest rates.
Personal loans – These types of instant funding for installment loans are used for several purposes by people. For instance, you might need extra cash to pay off that unexpected medical bill or consolidate debt. These have terms between 12 and 96 months, with usually a higher interest rate than other kinds of loans. However, these don’t need collateral, like your car or house.
Mortgages – This is an installment loan paid over 15-to-30-year terms with monthly payments. Some of these loans come with fixed interest rates that don’t change. It means the monthly principal and interest payments won’t change.
Can You Get An Installment Loan?
If you’re interested in an installment loan, search for reputable providers, firstly. Now call their customer service or use their branch locator to find the address or phone number.
Then, you can apply in person or over the phone. Some providers or banks also have the opportunity to apply online by completing your credit application 100% online. Now you will be getting a call of approval from them to see if you qualify. The other essential documents might have to be signed by you electronically. After all the steps, you will receive funds deposited into your checking or savings account.
Advantages of Installment Loans
In most cases, these loans come with predictable payments. If you take out a fixed-interest-rate loan, your payment’s base components will be the same every month until you ultimately pay off your debt.
A fixed payment amount and schedule could be manageable as this would help you in budgeting the loan payment every month, without missing any payments due to unexpected changes. While going for such a loan, ensure the monthly payments aren’t out of your budget. If it is, you may end up making full payment while having a financial emergency.
What’s best about installment loans is that you have the comfort of knowing your debt can be paid off by a specific date. After paying the number of installments required, your debt should be paid in full. One tip is to get a loan with the shortest payment term. You can afford to get out of debt faster by paying less interest.
Conclusion
Installment loans can have their drawbacks, too. For example, after taking out the loan, you won’t be able to add to the amount you need to borrow, like you can with a credit card or line of credit. You will have to request for a new loan to borrow extra money. To avoid this, always ensure you know exactly how much you need to borrow.
If you are thinking about getting an installment loan, make sure you thoroughly understand the terms and conditions. Ask questions to get the clarity of the loan. Then you can thoughtfully go for the best installment loan.