Instalment loans

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Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%

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If a customer is ever exploring different finance options for themselves, they may look into the possibility to obtaining an instalment loan. If doing this a customer will strongly need to take into consideration how much they need to borrow, the amounts they have to repay and over what period and they will also need to explore the different lender options that are out there.

An instalment loan is a set amount that is borrowed and then repaid over a certain time period in a number of instalments. When at least two repayments are due on the loan that is when it can be considered an instalment loan. There are many instalment loans out there for customers to consider including car finance, a personal loan and a Mortgage is another type of instalment loan. A lot of these particular financial products have many benefits and now in this article I am going to explain these in further details.

One of the main benefits of an instalment loan would be flexibility that the customer would receive when taking out the loan, a customer gets to select an amount they wish to borrow and then how long they wish to repay the loan over. When choosing the payment term a customer should always look to see what repayments are due to make sure they pick an amount monthly that will be taken and one they can afford. Also with making more repayments over a longer repayment term would mean lower monthly amounts but more overall would be paid.  It is always vitally important for a customer to choose as they need to make sure repayment is always affordable yet the repayment term is as short as possible, thereby reducing the amount paid back in total. Some shorter term loans do not offer as much flexibility in the way they lend an amount and then the customer has to repay that amount in full plus added interest on their next payday and if this is not possible then their other remaining options are very limited.

Another benefit of some instalment loans would be the speed in which they can funded. It will be quite common that most of these loans when applied for if approved will be in that customer’s bank account the same day as when the application was completed. Some lenders can fund the required amounts only about thirty minutes after the loan had been accepted. This will not always be the case as with enhanced emphasis on affordability and creditworthiness the lender may need other information to proceed. If the lender requests documentation from the lender in order to proceed with any application further then this can also lead to the loan taken longer before it gets funded. It would be more common if the loan being requested was for a high amount then documentation would most likely be needed to complete the application fully however each lender will be different and have alternative criteria for the customer to meet in order for any application to get accepted or not.

With longer instalment loans (say OVER 12 months) it is very common that the interest with them will be of a much lower rate than some of the short term loans around. I believe this is because as the repayment term is over a longer period meaning more total payments are made the interest rates are lowered. Many things can decide on what can be offered to customers with each application, that persons credit file can get the interest lowered with some lenders, the better the payment history in the passed the less chance of repayments being missed so interest can be lowered. It will obviously also depend on the lender directly and what they have to charge, at times the interest and charges can be negotiated on the loan but realistically this does not happen. If a customer is looking at submitting the application then they should compare various sites to make sure they get the lowered interest rates and they use one of the better lenders available to them.

Editor: The True Blue Loans products are a fixed interest rate so although creditworthiness is a major factor in deciding whether to lend it does not influence the interest rate charged.

Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%