An online loan is a solution for people who need a higher sum due to urgent expenses, but their financial situation does not allow them to pay their liabilities at one time. With this option, they can spread the return of cash over a couple or even several dozen months, thanks to which they are easier to cope even with the return of a high commitment. Installment loans were still a domain of banks a few years ago, but with the development of loan companies they also appeared in their offer. Today, most lenders, in addition to traditional payday loans, also offer installment loans online. What are their pros and cons? – you’ll find out in a moment.
Who can get a installment loan?
In fact, any adult person with citizenship can apply for this type of commitment. Lenders do not place high demands on their clients because it is one of the safest types of loans. Due to the fact that the repayment is spread over time, the installment to be paid each month, even with large sums, is not huge. Therefore, a non-bank loan via the Internet is suitable even for people with a very difficult financial situation, because even they are able to pay back large amounts on time.
These types of loans are especially for people who have a random accident, such as a broken washing machine, a car breakdown or forced renovation. In this case, you immediately need a large sum of money, which not everyone has. Installment loans allow you to receive the cash you need and also to repay it peacefully.
Advantages and disadvantages of installment loans
The biggest advantage of installment loans is that repayment is spread over a longer period of time, which makes it easier to pay back the debt on time. However, this also involves a higher total cost of loan than payday loans for 15 or 30 days. And all this because of the interest, which by definition depends not only on the amount of the liability, but also on its length. Despite the fact that the annual interest rate is lower for installment loans than payday loans, in the final settlement the total cost is higher because the liability is spread over a longer period of time. The indisputable advantage of installment loans is the fact that it is not difficult to get them and you can apply for much higher amounts than for payday loans. Sometimes, when a really big cash injection is needed,
What repayment period should you choose with an installment loan?
As was explained in the previous paragraph, the longer the period, the greater the total cost of the liability, so it makes no sense without the need to extend repayment over time. However, on the other hand, it is worth taking care of your financial security and you cannot commit to repaying the loan too quickly, because it may result in defaulting, which in turn will involve additional fees. That is why it is worth spending a moment before sending the form on the home budget analysis to best match possible loan installments to your options.
Installment loan – what should you pay attention to?
As with any other commitment, you should carefully review the terms and conditions of the installment loan in your company. Often, portals attract customers with a low interest rate or zero commission, but most such offers have a catch. If the interest rate is unbelievably low, it means that the commission will probably be excessive. Therefore, in order to avoid unpleasant surprises, it is worth very carefully, line by line, to trace both the data on the lender’s website and the contract he offers.