There are lots of different types of loans available and if you are thinking of borrowing money then it is worth making sure that you are picking the right type of loan for your needs. Find out about the different types of loans and then you will be in a better position to be able to pick the one that is best for you. There are some loans which you will probably know a lot about and some that you will know less about. Instalment loans are a type of loan that you might not know very much about and it is worth knowing more about them. Then you will be able to decide whether it could be a loan that will suit your needs.
What is an instalment loan?
An instalment loans is a short-term loan where you will borrow just a small amount of money. They are similar to payday loans in this sense, but you do not have to repay them all in one lump sum, but you can repay in instalments. This means that the repayment is easier compared with having to find the money all in one go. It is more likely that the repayments will be able to be made as well, which means that you are less likely to have to pay extra fees or charges. The loan does last longer, as you will not have to repay it in a few weeks, but if it means that you can manage your finances more easily as a result, then it is worth it. These loans can be organised quickly and they are available to most people, even those with a poor credit record.
What are they for?
They can be organised quickly and therefore will often be used for emergency purchases. This would be things like bills which need to be paid, replacing broken items quickly or paying for food for your family if you run out of money. As the money will be with you really quickly it means that you will have it available to cover those expenses almost as soon as you need it. This can be really beneficial, especially if you are at risk of having your electricity cut off, need to feed your children or need to buy a new fridge. However, it is worth noting that there is no check on what you are using the money for. You do not have to specify this so you can use it for anything you wish to. There are a few loans, such as a mortgage where the money has to be used for a specific purpose, but this type of loan is not one of them. Therefore, although they are designed for emergency use, they can actually be used for anything at all.
Who are they for?
The loans are designed for anyone but as they are available for those with a low credit score it tends to be these people that really use them the most. This is because they are limited in the amount of loans that they can choose from and therefore will have less to pick from. Those with a better credit score may choose a more conventional loan form their own bank as they may find that more convenient or they may decide to use an overdraft or credit card because they have already got these arranged.
Instalment loans are also easier for those people that do not have a large income. If you choose a payday loan instead then you could find it tricky because you will have to repay the whole balance in one go. The instalment loan allows you to repay over a series of months and this can be a lot easier, especially if you are borrowing larger amounts of money. Trying to find a large lump sum can be tricky for many people and so by breaking the repayments down into more manageable sizes this will be helpful for many people.
Whether this type of loan is the best one for you will very much depend on your situation. It will depend on how much you need to borrow, how much you can afford to repay and how quickly you need the money as well as your credit rating. It is worth thinking about what options are available to you because of your situation and then you will be able to match the right loan to that situation. You will need to think hard about what different loans will offer you as well as comparing them on price as it is important to think about the value for money that you will get from it. It can sometimes be worth paying more money for something if it means that you will get a better service, get it more quickly, find it easier to repay or whatever. So, do not just compare on price but look at other features as well.