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An installment loan is a type of loan that is paid off in a fixed number of regular installments, usually monthly payments. The repayment includes both the principal and interest. These loans are beneficial for paying off personal needs such as house renovation, car repairs, funding tuition, paying utility bills, etc. One can use it for their business needs too. In general, valuable features of installment loans include convenient rates, flexibility, easy terms, and other money-saving features.
Find below the distinct features of Installment Loans:
- These are relatively easy, simple and quick to apply online. It has a greater approval rate and a shorter approval period.
- It caters to a broad spectrum of borrowers with varied cash needs. However, it is ideal for salaried employees who need instant access to cash in a stress-free way.
- They are unsecured since there is no need for any collateral or security for loan approval.
- Typically, it allows you to borrow between $500 – $1000. However, few installment loan lenders allow consumers to borrow relatively high loan amounts in comparison to traditional lenders
- They deliver rapid access to working capital or for business development requirements to SMEs
- It charges no prepayment penalty or fee. If you desire to pay off your loan beforehand to save interest overhead, you can, by all means.
- You can reimburse the loan in easy regular payments depending on your cash needs and affordability to repay.
- It offers different interest payment schedules such as annual, semi-annual, quarterly or monthly.
- They provide the convenience of converting a variable-rate loan to a fixed-rate loan should there be any financial change.
- Loan term length and borrower’s income frequency decided the number of installments for the loan.
- Repayments are usually smaller. Thus, you can pay your loan installments, spreading them over a longer time.
- It offers lower annual percentage rates (APRs) than payday loans. The APR over the loan is calculated considering the number of installments, loan amount, loan duration, interest rate, etc.
- It helps you manage your budget for timely and easy repayment with an extended payback period.
- Regular and sensible payment of installment loans helps you improve your credit score. This can positively influence your chances of getting a loan in future.