Everything You Need to Know About Installment Loans
When you find yourself in need of some extra money, taking out a loan can be the solution you need. You might be taking out a student loan to fund your dreams of getting an undergraduate degree, taking out a mortgage to buy your forever home for your family, or covering some unexpected repairs on your car.
No matter your circumstances, there is a loan to suit your needs. It’s more than likely that these loans will classify as installment loans. Here’s everything you need to know about these types of loans.
What Is an Installment Loan?
Installment loan is an umbrella term that captures the vast majority of personal and commercial loans extended from lenders to borrowers. Installment loans can be repaid with regularly scheduled payments or installments.
An installment loan will provide a borrower with a fixed amount of money. Every repayment made to that loan will contribute towards the principal amount of the loan as well as the interest. The amount extended to the borrower and the interest rate will vary between each lender and each borrower.
What Is the Difference Between a Secured and an Unsecured Installment Loan?
Installment loans can be secured or unsecured. A secured loan is also known as a collateralized loan. As the name would suggest, a secured loan has collateral (such as a home or a car) in case you default the loan. An unsecured loan, on the other hand, is also known as an uncollateralized loan because it does not require any form of collateral. Many loans are uncollateralized but have higher interest rates as a result.
How Can You Apply for an Installment Loan?
The process of applying for an installment loan is relatively simple and straightforward. As the borrower, you fill out an application form with a lender, outlining the purpose of the loan and how much you would like to receive. The lender will then decide on the amount, the conditions of the loan, and the interest rate. The loan is eventually retired by the borrower once they’ve paid both the principal amount and the interest off in full.
Can I Get an Installment Loan Online?
In numerous cases, yes. Several lenders offer online installment loans, many of which are approved in 24 hours or less. You simply fill out and submit the application form online. Then, your application is reviewed and you’ll receive the lender’s decision as soon as possible. Once you’re approved, the funds will be released to you (usually via e-transfer). That means you’ll get them in just a few minutes in most cases.
From personal to student loans, secured to unsecured, there are many different types of installment loans to choose from. However, before you turn to an installment loan to improve your financial wellbeing, it is important to understand the ins and outs of these loans. The more informed you are, the better prepared you will be to borrow the right loan for you.
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