Online installment loans range from small amounts around $200 up to tens of thousands of dollars and are not intended to be repaid in full at the next payday. Monthly repayments are extended over a period of time.
When should I use an online installment loan?
A borrower should consider an installment loan if they have larger expenses or needs as the interest is lower than other bad credit loans.
Online Installment loans and a bad Credit Score
A vital element of online installment loans is your credit score so if you know in advance that you may be applying then you stand a much better chance if you pay attention to this ahead of your loan application.
There are plenty of credit score tools online like Experian that can give you this information.
Uses of online installment loans
These loans are useful for purchasing more expensive items or services such as building, cars, education, white goods, paying down existing higher interest debt and so on.
Note that it rarely makes sense to borrow to buy a depreciating asset. You should borrow when you use the money to increase your productivity.
Should I use installment loans to repay payday loans
If you already have too many payday loans you may want to consider using an installment loan. It may work out but longer term you should use a consolidation loan. Green Touch can offer you this excellent service to reduce your existing debts.
Pros of an online installment Loans?
Loan repayments are set up in advance so you know the amount you will be repaying with a fixed rate of interest, the payments remain constant and you can calculate what you exactly need to pay back from your next paycheck.
Note that these long-term loans may also carry a higher interest rate than other loan types so it is important to stick to your repayment schedule to avoid penalties and compounding interest on top of interest.
Installment Loans Have Fast Approval
From the time you submit your application until you receive funds can be as low as a few days once your application was successful.
Higher Loan Amounts
Online installment loans have a long loan duration and lenders are able to offer a higher loan amount than a short term payday loan
Cons Of Online Installment Loans
Payments are higher than traditional loans but not as high as a payday loan.Do your homework and compare both as by the time you have repaid in full with all interest and fees it may have been better just to take out a payday loan in the case where you only needed the money for a few weeks.
If you begin to miss deadlines for payments, this can result in larger fees and sanctions that can really increase the cost.
In some cases loans may be secured on your assets, if you fail to pay then these can be seized in order to pay off your debt.
Which type of Loan is suitable for you?
So summarizing the above you must think how much you need and for how long you need to borrow for in an almost instant payday loan. Is it for a quick 1 or 2 weeks or do you want to pay back over months?
Obviously, for a larger amount and longer periods, you should probably go for an installment loan.
Is your credit rating bad?
In this case, you are more likely to be accepted for a payday loan.
Can you manage the payments? Be honest with yourself and think if you really need to purchase the required goods or service and can you afford the monthly payday installments.
Take your time to consider all options and remember it’s not good to borrow and to buy something that will not increase your earning power.