Advantages & Disadvantages of An Installment Loan
Loans are not necessarily a bad thing. Installment loans come with their share of both advantages and disadvantages for you to consider before taking out one or more of these kinds of loans. They may be good for some things, but they might not be so good for others.
The main advantage is that installment loans do indeed exist when other lenders will not approve someone for a loan just because the applicant has bad credit or no credit history at all. Installment loans offer people who would otherwise be unable to obtain any kind of financing the ability to make large purchases or pay off high interest rate debts in manageable monthly payments over time…Questions you need to ask before getting a personal loan
The disadvantages for installment loans include that they are often associated with higher interest rates than other kinds of personal loans, the interest rate charged by lenders may be different from one borrower to the next, and late or missed payments could result in added fees and charges. Installment loans also have a stricter repayment schedule compared to traditional personal loans you might get at your bank or credit union.
The Advantages of Installment Loans
- Prepayment – You have the option to pay more than the required monthly payment as long as you do it before the due date of payment. In some cases, you can pay less than what is required if you have not used all your credits but check first with your lender.
- Installment Loans usually have a fixed interest rate and payment terms. Loan repayment is not required to be the same every month which makes budgeting for such payments easier.
- Installment loans usually offer a quick approval process. Hence you can get the money within 24 hours after submitting all the required documentation.
- Installment loans are more flexible compared to Personal Loans. You can use Installment Loan for almost anything that falls into personal use category including unexpected expenses like medical bills, home renovation, car repairs etc.
- Installment Loans are usually available to people with a minimum credit history, whose credit scores might be lower than average.
The Disadvantages of Installment Loans
- High Interest Rates, Installment Loans have high interest rates compared to Personal Loans. Usually, the interest rate on Installment Loans is higher than even Credit Cards. However, you may find installment loans with attractive interest rates in case they are not offered against property or collateral.
- If you fail to pay your installment loan in full by the end of the loan period you are charged an additional fee.
- Installment loans can quickly become expensive if not paid in full by the due date every month.
- Installment Loans require that you have a steady source of income.
- This type of borrowing may not be available to individuals who are self-employed.
There are many companies online that offer installment loans. Doing research in advance can help you determine which company may be the best fit for you. Sometimes all the online data can be confusing so reaching out to individual companies like MyFundingChoices.com may help you get the answers to questions you may have.
On MyFundingChoices.com you can see frequently asked questions (FAQ) to see what is required and how the process works. You can speak to knowledgeable personnel by calling (866) 949-5040 or emailing [email protected] to get assistance. Our personnel can walk you through the application process and let you know if you qualify and how quickly you can receive your cash as well as the terms of your contract.