Is an installment loan right for you?
Henry Githinji
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Is an installment loan right for you?
Installment loans have been in the market for a while now. The fact that they help the borrower breathe easier during unexpected financial situations make them very popular among people, especially with the current economic strain. Whether installment loans are truly beneficial for the borrower, there are a few factors to consider. How affordable are they, how is the interest calculated, can the borrower choose his own tenure, are they legal and how do they measure up against some other types of loans such as payday loans, these are all factors that need to be explored.
Affordability
Affordability
Installment loans offer cash loans from about $150 to a couple of thousand dollars. This allows the borrower to get the exact amount of cash he needs. The interest rates (annual percentage rates) vary from between 25% and 100% of the total loan amount. These rates are very cheap compared to other forms of loans like cash advances or payday loans. The annual percentage rates for most cash advances and payday loans range from 380% to almost 500% of the loan amount.
Management
installment loan is manageable
An installment loan is just highly manageable as other forms of loans. This is because its repayments are divided into equal monthly installments. This means that the loan is gradually paid up over a period of time, unlike the one-time full repayment of a payday loan on the borrower’s next payday. With installment loans, time is on the borrower’s side and there is a stipulated amount to be paid monthly. This lets the borrower manage his funds better. The ability to manage one’s finances and not being under pressure to pay up the loan all at once makes installment loans very popular among people.
Legality
installment loan a legal financial product
Being a legal financial product is one of installment loans most attractive aspects. An installment loan has already established interest rates, thus exploitation is not that common compared to the other forms of loans such as payday loans. Most states have well-stipulated legislations that protect installment loans. With such legislation, an installment loan is “safe” or rather, the borrower has the assurance that interest rates will not change overnight. Compared to the payday loans, borrowers of installment loans are definitely safer from extortion than payday loans.
Conclusion
As discussed above, installment loans seem to be good for anybody who needs fast cash during financial emergencies. They are affordable, safe, legal and totally manageable. Installment loans will not suck the borrower into a debt trap. It gives him time to actually plan out how to pay up the loan without any pressure. Its interest rates are totally manageable and are actually the cheapest among all loans currently available in the market. Installment loans are also easy to obtain. They are offered by banks and other financial institutions. Installment loans are definitely beneficial to you.
