An installment loan is a type of loan that is paid off in a fixed number of regular installments, usually monthly payments. The repayment includes both the principal and interest. These loans are beneficial for paying off for personal needs such as house renovation, car repairs, funding tuition, paying for utility bills, etc. It can also be used for business needs. Installment loan, in general, has definite valuable features such as convenient rates, flexibility, easy terms, and other money saving features.
Find below the distinct characteristics of Installment Loan:
- It is relatively easy, simple and quick to apply online. It has greater approval rate and shorter approval period.
- It caters to a broad-spectrum of borrowers, having varied cash needs. However, it is ideal for salaried class of employees who need instant access to cash in a stress-free way.
- It comes with an unsecured access, as no collateral or security is needed for approval of the loan
- Typically, it allows you to borrow anything between $500- $ 1000. However, few installment loan lenders allow the consumers to borrow relatively high loan amount, in comparison to traditional lenders
- It delivers rapid access to working capital or for business development requirements to SMEs
- It charges no prepayment penalty or fee. If you desire to pay off your loan beforehand to save interest overhead, you can, by all means.
- It offers flexibility to reimburse the loan in easy regular payments. It is fashioned to suit your cash needs and affordability to repay
- It offers different interest payment schedules such as, annual, semi-annual, quarterly or monthly.
- It gives the convenience to convert variable-rate loan to a fixed-rate loan, should there be any financial change
- The number of installments are worked out based on the length of the loan term and the income frequency of the borrower
- Repayments are usually smaller. Thus, you can pay your loan installments, spreading them over a longer period of time
- It offers lower annual percentage rates (APRs) than payday loans. The APR over the loan is calculated considering the number of installments, loan amount, loan duration, interest rate, etc.
- It helps you manage your budget for timely and easy repayment with an extended payback period
- Regular and sensible payment of installment loan helps you improve your credit score. This can positively influence your chances of getting a loan in future
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