There are many different loan types and if you are picking between them you may feel rather overwhelmed. Some are more well-known than others as well and this may lead to you choosing a loan that you know about even if it is not the best one for you. It is therefore wise to find out about all loan types and then you will be informed so if you do need to use one, you will know which one could be the best for you. An instalment loans is a loan that you may not know much about. The name does give away some clues as to how it works, but it is wise to find out more about it so that you can decide whether it is the right loan for you.
Quick to arrange
An instalment loan can be really fast to arrange compared to other types of loans. This will depend on the lender and you will need to ensure that you complete the application properly and provide all the information that they need. If you do this then you could find that you will get your money within a few hours or at least within a few days. This means that if you need money quickly then this could be a good choice for you as you will not have to wait as long as you often do for other types of loans. They are designed to help in emergencies which is why they can be organised so quickly and sometimes they may even be able to get you the money outside of banking hours as many lenders tend to be available to lend you money at any time even at weekends and evenings.
Many of us are used to the idea of payday loans, where money has to all be repaid in one go. This means that we may worry about being able to find al of the money to repay them and to be able to manage after that repayment has been made. An instalment loan is still a short-term loan with many of the advantages of a payday loan but you are able to repay it in instalments. This means that you can spread the repayments and not have repay so much all in one go. This is a great advantage for many people who might otherwise struggle to repay their loan. You will have to find less money for each repayment and therefore you will be spreading the cost.
Credit score irrelevant
Another advantage for many people of this type of loan is that the credit rating they have is not that relevant. Often lenders will take a look at our credit ratings and they will use this as a way to judge whether they are prepared to lend or not. They will assess the risk of the borrower and decide whether they feel that they will be able to trust them to repay their loan and that will determine whether they take them on or not. With an instalment loan this is not considered so if you do have a poor credit rating, then it is highly likely that you will still be considered to take on the loan.
Can borrow smaller amounts of money
With some traditional lenders it is not easy to get a loan where the amount of money you can borrow is just a very small amount. Often a personal loan will start at a thousand pounds and even if you have a more flexible type of loan, such as an overdraft or credit card, you could still have a high credit limit and therefore have a lot of money available for you if you wish to have it. The problem with this is that you may only need a small amount of money. However, if we get given more than we need, we tend to spend it and then find that we have loads to repay and we may not even be able to afford to repay it. It can be much better to go for a small loan and then you will not have to worry about whether you can find the money that you need to repay it. Hopefully by borrowing just a small amount of money, you will find it easy to manage the expected repayments.
So, there are quite a few advantages of instalments loans over other loan types. It is worth taking a close look at them and think about whether this loan will be one that will be suitable for you. It will depend on what your borrowing needs are as well as what your personal financial situation is like. However, you should be able to manage to easily compare it and know whether it will be the right loan for you.