Once in a while, people run out of cash. Human needs are so insatiable that you will always need more than you have.
So, what do you do when you have fewer than required dollars? Loan, borrow, or sell one of your assets? Loans are common strategies that people use to leverage their financial needs.
If you are a business owner loans are commendable financing strategies. In the US, there are more than 19.5 million personal accounts for loans. There are various types of loans.
Read this article to learn about installment loans and their benefits.
What is an Installment Loan?
An installment loan is a lump sum amount of money borrowed. You’ll pay back the money in installments over an agreed period. The payment plan is done monthly, inclusive of interests.
As a borrower, what are the terms you consider in installment loans?
- The amount of loan
- Interest rates
- Terms of payment and
- Period of payment
Before settling an agreement on the installment loan, discuss the four key factors. Installment loans are in two forms: collateral loans and non-collateral loans. Auto and mortgage loans are mainly collateral installment loans.
In most cases, installment loans don’t have collateral.
Under what situations should you consider the installment loans? People have varying needs to meet. How do you use the installment loan?
You can use the credit to finance a car, furniture, a home, to pay for college, among others. If you’re a business owner, the credit can help boost your gig. An installment loan is commendable for situations that need one big purchase.
With this insight, you must be wondering, what are the procedures to acquiring the installment loan?
How to Acquire an Installment Loan
The procedure of installment loan processing is simple. If you need the loan, find a reliable organization to get the loan and follow the below steps.
- Analyze your qualifications for the loan.
- Apply for the installment loan either manually, online, or via call. Research suggests that online installment lending increase annually. This is due to its convenience of time and distance.
- Submit the application form
- Provide all necessary documents
- Discuss the installment loan options
- Get an agreement for the installment loan and wait for the money.
Caution: Get all necessary information about the loan to avoid possible complications in payment.
To evaluate whether installment loan is good, read through its benefits and disadvantages.
Benefits of Installment Loans
The fact that the loan helps sort your financial problem is already a benefit. However, in analysis of merits, you need to go deeper. Some loans may leave you or your business in a crippling financial situation. You don’t want that, right? Installment loans benefits are:
Long Period of Payment
Installment loans are a lump sum. With large amounts of money, you have to be cautious to avoid stress during payment. Installment loans factor the aspect of payment.
Almost all installment loans have a long payment time.
Extended payment periods help to plan the monthly installment evenly. It thus, makes repayment manageable and protects from troubles of defaulting agreement.
Reasonable and Fixed Interest Rates
You need not to worry about increasing interest rates. Installment loans have fixed rates. Such interest rates help lower monthly payments.
Besides, it improves personal financial management as you’ll know what to expect every month.
Fixed interest rates make the monthly payments regular. You can efficiently plan your income.
Easy Processing of the Loan
Installment loans processing time takes three to two days shortest time. The loan processing time never goes beyond two weeks.
The documentation and requirements for loan processing are minimal. With, such conditions, loan processing, therefore, takes a short time for approval.
Are you in an urgent need of a lump sum loan to settle your business financial crisis? An installment loan is a solution for you.
The application process is straightforward. Upon application, some companies may offer an instant decision.
Large Borrowing Options
Do you wonder why you can’t consistently save money despite having a potential income?
Saving is a demanding lifestyle. It requires a lot of discipline to save money for the target car, house, or business.
Installment loan helps you get the big targets of life.
With lump some money offered, you can buy that house or car you always desire. If your business is in crisis, the funds can help save the situation.
The monthly installment will compensate for the strained consistency in savings.
Consider all Credit Ratings
Loan approval requires analysis of many factors. The goal is to ascertain your ability to pay the money. This must get you worried if you’ve a poor credit history? Worry not.
Installment loans consider all possible credit ratings. Majority installment loans provide options for all possible conditions and credit ratings.
The primary factors you need are; prove of identity, address, and income.
Disadvantages of Installment Loans
There’s always a negative side for anything with merits. So what are the dark sides of an installment loan?
- Penalties: violation of the payment agreement may attract fines and poor credit ratings.
- The Agreement is not Re-negotiable: Once you sign the agreement on the installment loan, you can’t go back. None of the terms are renegotiable. It explains where there’s a need for caution before signing the contract.
- High-Interest Rates: Installments with long repayment periods mainly have high-interest rates.
- Repayment is Compulsory: If you’re a business owner, you understand that there are risks in business. It’s not always that an investment attracts positive returns. Despite the financial conditions you get into, you must pay the installment loan.
Are you in need of lump sum money to save or expand your business? You’re not alone. Everyone gets in such conditions, once in a while.
Use an installment loan to leverage your goals and dreams. Installment loans are easy to access, have regular payment plans, and long repayment periods. However, before signing the agreement, make sure to discuss all critical issues.
Visit our website to learn more about installment loans and other financial issues.