- SwagBucks Take surveys, watch videos & shop to earn real money. Join Swagbucks Now to Get $5 Free
- SurveyJunkie: Make $5-$25 in your free time. Just take online surveys, participate in Focus Groups and trying new products. Join SurveyJunkie Now
- InboxDollars: Has so far paid its members over $40 Million. Watch videos, take surveys, shop and more. Join InboxDollars Now and Get Free $5
It’s not always the case that you have ready cash for necessary expenses. Sometimes, you can’t afford to cover a house repair, car purchase, or tuition fees. Your only option is to borrow money.
But the question is, where to borrow some cash to cover your urgent expenses? Should you get a credit card to pay for them? What are the best options out there for your financial situation?
Indeed, it can be tough to borrow money because there are some risks associated with it. However, there’s a good option for anyone who needs to loan some cash. I’m talking about online installment loans.
Here’s why this type of loan is favored by many people who want to borrow money. Read on below.
What is an Installment Loan?
Newbies will surely ask: what is an installment loan?
This type of loan is another term for personal loans, student loans, and home loans. These loan options have an installment repayment structure, hence the word “installment” to its name.
Like any other type of loan, installment loans have three components: the annual percentage rate or interest rate, loan term, and ancillary fees.
Annual Percentage Rate
The annual percentage rate or interest rate refers to the amount of interest charged during the life of the loan. Online installment loans have varied APRs depending on the loan amount, loan term, the borrower’s credit score, and the lender’s policy.
The loan term is the length of time agreed upon by the lender and borrower to repay the loan. Installment loans have loan periods ranging from 1 month to 30 years. Typically, the larger the amount borrowed, the longer the loan term.
The ancillary fees refer to the service fees imposed by the lender in processing the loan. For example, there are application and origination fees that you need to pay to the lender. Moreover, there may also be penalty fees if you miss payments or pay back the loan before its maturity date.
Advantages of Online Installment Loans
Due to the fees and interest incurred when taking out a loan, some people only consider borrowing money from a lender as a final recourse. But there are times when applying for an installment can prove to be a good financial decision. Read this list of advantages to learn more.
One advantage of getting an online installment loan is that it’s easier for borrowers to apply for it. This loan type requirements are more lenient compared to loans offered by traditional lending companies and institutions.
You can send an application online and acquire the amount you need within the same day or your application’s next business day. If you need fast cash, it’s recommended to apply for an online installment loan.
Easier to Manage
Another benefit of taking out an online installment loan is its manageable repayment process. Since the repayment is on a monthly installment basis, it’s easier to manage your budget and set aside money for your loan repayment each month.
Depending on the agreement between you and the lending company, you can also pay back your debt weekly or every two weeks. This flexibility offers financial convenience to the borrower, and it also ensures that he/she can consistently repay the loan.
Affordable Interest Rates
When applying for a loan, you need to consider its interest rate. Always look for a loan offer that has an affordable rate so that you don’t have to pay much for the money you borrow.
Compared to credit cards and payday loans, online installment loans have lower annual percentage rates. Another good thing is that it’s fixed-rate, meaning that what you pay each month doesn’t fluctuate. This feature enables you to pay off your debt faster.
Moreover, you can avail of a tax benefit if you apply for an installment loan. It’s another feature that makes this loan type a good option over any other types of loans.
It Can Improve Your Credit Score
Yes, you heard it right. Acquiring an installment loan and paying it on time can help boost your credit score. Again, you have to ensure that you pay the scheduled installments consistently to achieve that goal.
If you make consistent payments, this positive behavior will reflect on your payment history. Plus, getting an online installment loan also diversifies your credit types, which can also increase your score.
Also, check – How To Safely Borrow Money Online – 4 Legitimate Tips
An online installment loan can be useful to pay for necessary expenses, such as a car purchase, house repairs, medical bills, etc. You won’t have a problem applying for it, and it’s also easier to manage due to its installment basis repayment. And, compared to other types of loans, online installment loans have competitive annual percentage rates.