Understanding Installment Loans for Bad Credit
When it comes to installment loans, they include a set number of payments done over time, which include auto loans and mortgages. For instance, Jane wants to borrow money worth $1,000 for an emergency medical expense. Jane takes out an installment loan, needing paying the amount back within 24 months period at a 25% interest rate. In an installment loan, Jane can get a check worth $1,000 and pay regular monthly payment of $53.37 for a period of 24 months. What is the difference between a payday loan and an installment loan? Payday loans have higher interest rates, paid as a single lump sum on the next payday of the borrower, and are consider short-term loans. Installment loans are flexible because the payments can be spread in many months over the term of the loan.
Installment loans is the best option for people without a credit history, for those who have bad credit or poor credit, in order to help to build a good credit history. Since installment loans involve multiple payments, they help in creating a history of repayment. If you are making timely payments, you can build a good credit history because a borrower’s payment history is reported to credit reporting agencies. Installment loans can help Jane establish a good credit history for better business transactions. If you need extra funds that cash advance can not provide, your best option is an installment loan. As compared to payday loans, installment loans offers more flexibility to borrowers because the borrowers can decide the length of time they need to repay the loan and the amount they want to borrow. A borrower can decide on a long-term loan with smaller payments or vice versa. Not all states have installment loans, and there are some states that dictate the minimum and maximum loan amounts that a borrower can borrow from an installment loan.
There are interest charges and associated fees involved in the cost of an installment loan, that needs to be explained in the lender’s loan agreement, and notifications should be sent to the borrower if late fees apply if ever the borrower is unable to make payments on time. You need to make sure that if you are planning to get an installment loan, the lender should clearly express all fees and charges in a dollar amount as well as an APR or annual percentage rate as required by the U.S. law. Make your credit standing positive by getting an installment loan today, to help establish your good credit history, so talk to us now and we will help you out! Instalment loans can be your best option in times you need to establish a good payment history, and we can be your partner!