Understanding Loan Terms

Understanding Loan Terms

3 Questions About Getting An Installment Loan

by Gregory Hall

In a situation where you have a need to borrow some money? If so, consider getting an installment loan. This type of loan not only improves your personal credit rating but will get you the cash you need. Here are two questions about getting this type of loan.

1. What Are Installment Loans?

Installment loans are essentially loans that are paid off over time with fixed payments. You continue paying off the loan in small installments, and once you've paid off the balance with interest, the terms of the loan are complete.

Interest rates vary on installment loans depending on what sort of collateral is used. If you are using an installment loan to buy a specific item that can be repossessed, you'll find that the interest on that loan will be fairly low. However, a loan on something that cannot be repossessed will have a higher interest rate. You may be able to use collateral to get a lower interest rate, but it is not a guarantee.

2. Why Use Installment Loans?

Installment loans are a great way to help build credit. The loans have regular payments, which gives you plenty of opportunities to show that you can make the payment in full and on time. This can be great for someone that is trying to build credit and needs a loan. Just make sure to not miss one of your payments, since that can hurt your credit rating.

The terms of your loan can also be fairly long if you need it to be. You'll pay more in interest, but it can help you avoid missing a payment due to an installment that is too high.

Many people find that the interest rate on this type of loan will be much lower than using their credit card to make a large purchase. Credit cards also have the ability to allow you to just make minimum payments, which can be dangerous since you can keep putting off repaying the debt.

3. Are Installment Loans Given To People With Bad Credit?

It's possible to get an installment loan, even if you don't have the best credit. You'll likely need to try using different lenders to find one that will work with you, or provide collateral that is worth much more than the value of the loan, but you can get the loan you need for your financial situation.

For more information about installment loans, speak to a financial lending company like American Cash Advance and Title Loan.


About Me

Understanding Loan Terms

When I started my own company, I knew that I needed a little business capital and fast. In an effort to raise money, I worked with various lenders to discuss loans, financing, and special terms. Unfortunately, I quickly discovered that not every loan was created equally. Some loans had almost predatory terms like high interest rates and penalties, while others were completely fair. Fortunately, a business consultant of mine taught me about loans and financing, so that I could make better choices in the future. The information on this blog saved my business, and I know that it can help yours too.