Explaining Instalment Loans
Lending is a complicated field. There are many different types of lending options, which can often make financing feel overly confusing and difficult to understand. Nevertheless, if you’re in a position where you’re considering borrowing money, it’s important that you do understand what options are available to you. Not only will this help you find the best deal but it will also help you to avoid getting into trouble further down the line.
What are Instalment Loans?
Instalment loans are a popular type of loan which fall under the more general heading of ‘personal loan’. They are extremely common, although they are not always referred to in the correct way and this can make it difficult for people to differentiate between this type of loan and others.
Simply put, an instalment loan is any type of loan which is repaid over a set amount of time. The lender and borrower will agree to a fixed repayment plan which involves the borrower making fixed payments – usually monthly – until the entire sum of the loan is repaid. Two well-known types of loans are mortgages and car financing.
How to Access Instalment Loans
Instalment loans are generally considered to be one of the safest forms of lending, as there are no hidden fees and loans offered by independent companies usually offer interest rates which tend to be in line with those offered by banks.
Instalment loans can be accessed in one of two ways. You can either go in to make an application in person, either at your bank or with an independent provider, or you can make your application online. To apply online for a personal loan, you will need to provide some personal details about your identity, your address and contact information, and sometimes your existing bank account. This is so the lender can conduct a check on your credit record and verify that you are eligible to meet their criteria for borrowing. Because you will be divulging personal information it’s important to make sure you’re staying safe online. Never click through to a lender’s website from an email, as this is a well-known phishing tactic. Instead, go straight to the lender’s website or click through from a reputable search engine such as Google.
Is an Instalment Loan Right for You?
As with any type of borrowing, not everyone will be eligible for an instalment loan. To qualify you will need to have at least an average credit rating and proof of a fixed address. Some lenders also require that you be in full-time employment. Remember that if you get rejected by one provider it’s more than likely that you will be rejected by most others. Multiple rejections will have an adverse effect on your credit rating so don’t be tempted to keep applying on the off chance that someone will say yes.
With regards to your own personal suitability for an instalment loan, as long as you are confident that you can keep up with your payments then this type of financing will most likely be the right choice for you.