Odds are if you use credit, you’ve heard of installment credit, but do you know the benefits of taking out an installment loan?
Credit can be a helpful tool when it comes to financing purchases. We experience credit in many ways throughout our financial lives. We use credit to purchase everyday items online, but also to finance large expenses such as a car or home.
If you are looking to take out a line of credit but don’t have the cash on hand to make a large purchase and need the total loan amount upfront, installment credit may be a good option for you.
How does installment credit work?
When you take out an installment loan, you borrow a specific amount from a lender and agree to pay the loan back, along with interest, in a series of monthly payments.
Compared to other loans an installment loans interest is fixed from the beginning and won’t change throughout your repayment period.
Installment credit has an end date to it which makes it unique compared to other forms of credit. Once the loan has been paid off, the line of credit is closed. If the borrower wishes to borrow again, they will need to reapply for new credit.
Benefits of Installment Credit
Small loan amounts
An installment loan can cover whatever amount you’ll need. Whether you need a few hundred dollars or a few thousand, you can find a loan that suits your financial needs.
If you’ve had trouble getting loans in the past, you should look into getting installment loans. Many installment lenders are willing to give loans to people with low credit scores.
Get approved fast
When you need money fast, waiting around for a lender’s approval is not an option. When it comes to installment loans, the approval process is very fast. You may be able to have your loan approved in a matter of minutes!
Unlike other loans, installment loans won’t require a lot of paperwork or documentation. If you are over the age of 18, are a US citizen, and have a valid bank account you’re good to go.
Short payment plan
One of the benefits of installment loans is their short lives. Some can even be set up to be paid off in 90 or 120 days.
You won’t have to worry about spending years paying off your loans. You’ll have your money and pay everything off fast.
Installment loans don’t need to be spent on one specific thing, you have the freedom to use them as you see fit.
Great for last minute costs
Looking to get out of town for a last minute vacation? Did you see the perfect dining table that’s on sale? Use an installment loan to pay for big purchases!
Installment loans can be the answer to some tough financial questions. They’re easy to qualify for, you can pay them back in a short amount of time, and they can help you out when you’re in a bind.