What hits your mind when you hear about installment?. Intervals, right?. While there are many types of loans that require one time payments, there are those that are paid with intervals. These are called installment loans. Once you take this type of loan, you will be scheduled to pay a certain amount of money within an agreed period. It may be weekly or monthly and in some cases yearly.
There are very many reasons as to why people take installment loans like to settle a hospital bill or to clear bad debt. These loans have various advantages such as quick and easy application process, and at times no credit record is checked.
When should you consider taking an installment loan?
Sometimes you find yourself going through financial struggles and taking a loan an ideal way to rescue you. Here are some situations when you should apply for an installment loan.
If you have no job
While most people have the perception that to qualify for a loan you must be having a stable job, you only need to be having a regular source of income to qualify for an installment loan and obtain it successfully. Payments from securities and pensions are also considered to be forms of income, and you have to show those income proofs and your repayment abilities.
Planning for large purchases
Some purchases require you to be having a lot of money at the right moment, and at times you may find that you are short of cash. Installment loans are used for large purchases such as buying a new home or a car. However, the interest rates and payment terms vary depending on the amount of loan that you have taken.
If you want to increase your credit ratings
It is the belief of many people that for you to obtain a loan, you must have a good credit record, but to a lender, your scores in credit is not a significant factor that influences his/her decision to grant you the loan. Nevertheless, there are bad credit installment loans issued to make those large purchases. Making your loan repayments on time helps to grow your credit score and eventually you will find yourself having built a remarkable credit rating.
If you are avoiding to interfere with your finances
Some emergencies occur in our lives and to contain the situation money is required. For instance, a medical emergency requiring a large amount of cash may ruin your financial budget. That’s where the installment loans come in, to help you solve the problem. You are given the amount that you need and be repaying it in small volumes.
There are some crucial factors that you should always ask before accepting the loan. For instance, the interest rate that you will be paying is the first thing to enquire. The charges will help you weigh yourself on your ability to repay it. Another thing is the period of payment. Consider choosing a loan that has a longer term since the longer it is, the smaller the amount you will be paying each interval.