Installment loans can be described as any type of loan you apply for where you will be paying the money you borrowed back in small lump sums. They always have a term or length of time set and many will have the payments due on the same days. These loans are the most popular type of loans and can be found at many banks or lending facilities.
Typically secured with personal property, collateral loans can be safer than alternatives such as payday loans. Oftentimes, interest rates will be lower and pay periods much more flexible as well. Some examples of installment loans are:
You also will find installment loans at many retail stores where large items are sold, such as a new refrigerator or mattress. No matter what you need the installment loan, for they all work the same way.
The primary function of an installment loan is making it easier for you to pay off an item without having to do it all in one go. It allows you to work out a payment schedule that not only works for you, but also allows the retailer to get the money they earned.
Many installment loans can be offered at lower interest rates because they are easier to pay back. You also may see more loan specials or special offers with installment loans because they work so well. Most installment loans offer terms anywhere between six months and five years, with mortgages being the only ones that go longer than that.
The only time you may run into issues with an installment loan is if you do not pay back the money in the allotted time period. Then you may run into issues like higher interest rates, penalty fees, or even the dealer or bank taking back your car or house. So make sure no matter what you sign up for, you can pay back, with the interest they charge.
Since installment loans are normally found at banks or retail shops you want to make sure that you like the lender you end up with. Each loan is different and can involve a different set of paperwork or certain details from you, so find someone willing to take the time to explain everything to you before you sign. Some people may try to trick you into signing up for something you can't work with later on, but if you have the right lender they can make your installment loan fit you better, adding a more personal touch.
The crucial thing to remember with all installment loans is that there are more than one out there. When you decide to apply for one or use one to purchase something, make sure you know all the details or facts before signing or handing over your money.
One of the most popular of installment loans is the dealer loan or auto title loan. These are normally sold as two separate types of loans, one found primarily at car dealerships and the other showing up either online at specific sites or at your bank. These loans normally have middle to low rates and terms lasting a year up to three with some going all the way up to five years. Dealer loans will sometimes have you put a percentage down to begin the loan, while most title loans just have you hand over your car title with the first payment starting a month later.
Another popular installment loan is a home mortgage, where you work to pay off your house. Without these loans many homeowners would not be able to afford their homes. Banks let you borrow against your house with the idea that if you stop making your payments or fall behind they can take back your house. These loans normally have interest rates that depending on the housing market can be low or high. Right now we have low interest rates, showing that the market is a buyer's market. You also normally end up with longer terms some ranging from 15 years to 30.
Unsecured loans can technically be either installment loans or just a one payment loan, but when they are installment loans you normally end up with higher interest rates and shorter terms. The reason for this is because there is no collateral so if you end up defaulting on the loan the bank may end up out of the money. Unsecured loans are not as popular as title loans or installment loans (the retail stores) so they may be a bit harder to find, but you never know when they may have a better rate than what else is being offered.
Loans can be one of the best things you can apply for if you use them right, or they can harm your chances for future loans with one bad choice. With many different options to choose from, the best choice for you is what you believe is the best. Always weigh your options taking your time to choose the best installment loan for your life.
From the minute you first apply for an installment loan to the moment you finalize the paperwork always make sure you understand everything the lender discusses so nothing sneaks up on you later. Recognizing when certain principles may not work, or asking questions about the loan itself are always good ideas when working with someone you have not worked with before. Most lenders you can trust to find you the best deal they offer, but there are always those who might not care enough.
Whatever you decide to do regarding your installment loan make sure you get the best deal you can get. With options like mortgages, car title loans, unsecured or secured loans, dealer loans and other specific loans based around what you are purchasing, you can always rely on an installment loan to get you the money you need when you need it at rates you can afford. All in all the most important thing to take away from this is that each installment loan may be a bit different, but they all allow you to pay back the money you owe at a rate you can work with.
By working with our lenders, you could end up saving up to 20% on your repayment, and eliminate the risk of being taken advantage of.
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