Instalment loans are one of the most popular types of loans to take out, and there’s no question as to why. There are versions available out there for those with poor credit scores, they’re generally regarded as better than a payday loan, and you don’t have to pay everything off in one go – the clue is in the name. The loan is paid off in “instalments”. If you’re curious about instalment loans, or if you’re even considering taking one out then as with any financial decisions it’s important to do your research – but what are the positives to taking out instalment loans, and are there many negatives?
Today we’re going to explore exactly that.
What do I need to Provide in Order to take out an Instalment Loan?
It doesn’t matter whether you’ve got the world’s best credit score and are based in the UK, or are searching tirelessly for instalment loans no credit check Canada – there are certain details you’re going to have to provide to your chosen lender in order to be considered eligible to apply for the loan in the first place. Now these do differ from place to place, but tend to include the following or similar:
- Your age. It’ll differ on where you’re based on how old you have to be, however, so look into it.
- Your bank account details. This is usually so that the lender can transfer the amount you’re requesting directly into your bank – but be mindful of who you’re giving these details out to, and make sure the company you’ve chosen are reliable.
- Proof of employment, or at the very least, proof that you have money coming in on a regular basis. This is just to assure them that you have the funds in order to pay the money back that you’re lending.
Pro: They can Work to Fit You
One of the positives of instalment loans, is that they can be adjusted in order to fit your own personal needs.
Unlike payday loans, instalment loans don’t have to be paid off in one large lump sum. The paying back of this money is usually agreed between yourself and the lender, and tends to work on a fixed rate. This means that you’ll come up with a monthly date where a set amount of money will be taken out of your account in order to repay the loan. This amount can be dependant on you, so if you wanted to pay it back in smaller instalments, you could arrange for the instalment loan to be a long-term repayment loan, instead of paying it all back in large lump sums.
It’s all up for discussion, and if you sit down with a lender, you’ll surely be able to come up with something that works for both of you.
Con: Not all Lenders Advertise Excess Fees
One of the cons of taking out this kind of loan, is the risk that the lender hasn’t advertised the excess fees they might charge further along in the process.
The vast majority of well reputed companies that can be trusted will either advertise with these fees upfront or won’t have them at all, but it’s always an idea to be mindful that they could be a possibility. It’s all really about being vigilant when choosing a lender in the first place – so do that, and you won’t be duped.
Pro: They’re often Readily Available
Whereas some loans can be difficult to apply for and take out, instalment loans are often readily available and easy enough to apply for.
A lot of them don’t require credit checks, and as we listed earlier, the requirements tend to be minimal in comparison to other similar loans. So long as you’re eligible for the loan, you’re likely to be able to get one efficiently.
Con: Interest Rates Can Vary
Another thing to watch out for with instalment loans, is the cost of the interest rates.
First of all, they could be expensive. Second of all, they could work on a variable rate – so be mindful of this when choosing your lender and taking out a loan.
Pro: They’re Easy to Apply for
It makes sense to end on a positive, right? So we’ll finish up by saying they’re easy to apply for.
There’s no back and forth with the bank – simply go online, complete a ten minute application and so long as you’re eligible, you’re good to go. Just remember to be vigilant, do your research, and find the right deal for you.