An installment loan is defined as a loan wherein a set number of scheduled payments is made in a specific given period of time. For example, Jane needs to pay $1,000 for an emergency medical expense. Jane can take out an installment loan requiring her to pay the amount back in twenty-four months at a 25% interest rate. Jane will need to pay $53.37 for a period of 24 months in an installment loan. 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 are usually used to help to build credit for those who have a poor credit, bad credit, or no credit history. Since installment loans involve multiple payments, they help in creating a history of repayment. 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. Installment loans are more flexible than other types of loans because the borrower can decide the amount to be borrowed and the length of time it can be paid back. 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.
Installment loans involve applicable fees and interest charges, and if the borrower is unable to make on-time payments, then any late fee must be notified to the borrower before application and collection. 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! We wills hed light to the facts and benefits of installment loans.