What is Installment loan?
The term ‘loan’ itself triggers the senses of fear inside our heads. Well, to concise the fear, we need to fight the battle by breaking it into tiny pieces, and if the loan is called a monster, the pieces are installments. Here, all we do is repaying every buck in a slow and steady manner.
By doing this, we can lift the pressure from our chests and save ourselves from the consequences of paying heavy interests to the sum of money we lent from the source.
On a brief note, an installment loan is a long-term loan, here, the total amount is divided into parts and will be paid in a systematical manner, the duration of repayment might last from a couple of years to a decade or two. Here the money is paid out in monthly installments over the course of several months. Now, the amount that should be paid depends on the financial capability of the person and the maximum less time one wants to pay.
If you take a $12,000 USD from someone, and you can’t repay him within weeks, you can opt for an installment loan, here you can pay him $1000 USD for every month for each month for one year.
if you are unable to pay him that big amount every month, you can proceed by paying $500 USD each month, and the deal lasts for two years. Most of the times, there will be a percentage of interest on the total principal amount.
In general, the lenders play two popularly known tactics on you if you agree for an installment loan, first- they lure you by offering the loan insurance packages, secondly, they might try convincing you to renew the existing loan with the lesser or the default interest.
Now, the insurance policy is somewhat complicated when the situation comes to it. On a common note, the insurance premiums charged by the lenders usually pay for death and disability insurance. These premiums benefit the lender more than the borrower, if the borrower dies or becomes disabled before they are able to repay the loan, then the lender will still be paid through the insurance policy.
On the other hand, if the borrower offers some suitable property like a car as the collateral for the loan they may also be offered auto insurance.
Reasons to opt for the Installment loan:
Thanks to the technology, these are the days when you can opt for the loan through the websites. All you have to do is do proper brainstorming, get a quick access to the loan, they pay it back through multiple payments with no worries involved by the payday loans. Most of the times, just after being approved, you can witness the money deposited in your bank account on the following business day.
Who knows what comes next, we must always have some bucks in our savings account. So, it is always better to preserve money every month. Major reasons to opt for the Installment loans are Emergency cash needs, Unexpected expenses, Paying off another loan, or for some extra cash to cover a specific event.
What if you fail paying the Installment?
Though you won’t be facing this trouble more often, there might come a time when you have other important expenditures rather than the sole installment.
One thing you must keep in mind is that the installment loan lenders can be very aggressive when it comes to retrieving payments. Few of them deliberately start with phone calls and others can even go ahead with the home and office visits. In the worst-case scenario, lenders contact the references a borrower lists on their loan, sometimes up to 2 or 3 times a day.
Now, if all this doesn’t give up the positive result, the lender may resort garnishing the borrower’s wages.
Make a note that there are thousands of lenders in the outside market, and picking up one of them is not a simple task. Start with basic math like comparing the interest rates, fee, and APR between them. Prepayment penalties and automatic rollovers also pay the prominent role.
So, if you want to become part of the installment loan borrowers family to safeguard your monthly expenses like a boss, then step ahead and take a loan from loanshop.