Instalment loans, what they can offer

 

An instalment loan is one of the most common type of loan and finance that is available in the market place. Many customers at some stage will make applications for these and will further be accepted and the funds will be sent to their bank account. While there are many positives about these there can at times also be negative factors with instalment loans and I will explain about these in more detail now and will use the article below to do so.

 

An instalment loan can offer a customer a short term or a long term way of borrowing, the amounts that can be acquired for the customer depends on the lenders criteria and their overall final decision but also the customer has to choose the amount they wish to borrow and then submit the application for this amount. In some cases the underwriters can come up with the decision to accept the application but for a lower amount than what was originally applied for and if this does happen then the customer would have to most probably resign the loan agreement and then proceed (if they wanted to) with the loan for the lower amount that was offered. Many instalment loans can be very quick in the way they are funded, some companies can pay their customers about half an hour from when the application was approved however some companies it can take several days for the loan to be paid out. It all depends on the borrower that is chosen, whether any documentation has been requested before the loan is processed further and also the amount requested. The more that has been applied for the longer the application can take before it is fully completed and then funded.

If a customer is wanting to borrow money for something that has to be paid right away an instalment can help with this. Instalments loans can be small or high amounts and then can be paid over multiple instalments. This is a positive thing as it does not put pressure on the customer and ask them to repay the amount borrowed in one hefty sum, they can quite simply spread the payment costs over a time period that suits. Some short term loan companies provide the same level of funding but have to ask the customer to repay their full loan balance within a month and at times this is just not possible for the borrower. It is that instance where the instalment loan is the better loan alternative than the common single payment short term loan. One thing that MUST be remembered, while a longer loan makes the instalments lower it also INCREASES the total cost of the loan.

An instalment loan can also offer finance options for certain big purchases such as car finance, also a Mortgage can be obtained as an instalment loan. This way customers can get the finance they need and not repay the total balance in one go. Once the full balance is repaid and only then will the item belong completely to that customer. Before a big purchase is even applied for a customer must look at their disposable income to see what other outgoings they have and this can then determine what repayment amount they can have on their finance for each month, the more repaid monthly the less time the account will be outstanding for. With that being said it is always important to repay an amount that is affordable as missing repayments on large finance purchases such as cars can lead to people coming and taking them away or if repayments are missed on a Mortgage then the financial lender has the power to repossess the house and then sell it meaning any previous repayments made for any amount would have come to no avail.

Before any instalment loan is taken out a customer must always look around and explore the different available options for them so they can choose the right product that suits them the best and one that offers the best repayment term. When comparing these sites people must make sure they pick a loan that offers the amount they are requesting to borrow, has a decent interest rate and the lender is established in the field and they are a decent company to use. Some of the best sites to explore these different lenders are Go Compare and Compare the Market. 

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%

 

 

Warning: Late repayment can cause you serious money problems

For help, go to moneyadviceservice.org.uk

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%

This article contains information about products/services offered by us as well as those that we do not offer.

Author: Internal Marketing Department

  

 

By Gemma Lane