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Installment Loans and why they are Great Options to Consider

Key points

  • Installment loans are long term loans that allow customers to make repayments over a long period.
  • They offer larger sums of money to customers.
  • Interest rates are considerably low since payment will be made monthly.

When in need of quick funding to address urgent finances, the first thing that always comes to mind is where to find the money. Luckily, there is an array of loan options available online that you can safely take out from reputable brokers like Pick A Loan. The question now is, what type of loan is suited for you and your present circumstances? If you need a larger loan that you can pay back in longer periods of fixed monthly rates, installment loans are the options that you can look into.

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What are installment loans?

Instalment loans are financial products that you pay back monthly, rather than in a single lump-sum payment.  Installment loans provide a set number of scheduled payments over time making them easier to budget and appealing options to many borrowers. Numerous types of loans like personal loans and logbook loans are installment loans.

With installment loans UK, you can take anything between £50 and £2,500 depending on your:

  • Credit history and Credit Standing
  • Income Level

 

How installment loans work

Let’s say you want to take out a £1,000 installment loan to cover an emergency car repair. The lender grants you the loan and you agree to pay him back the amount after 24 months at a 20% interest rate. With the installment loan, you will receive a check for £1,000 and then pay regular monthly payments of £50 for 24 months.

Getting the best installment loans online

If you want to enjoy the best installment loan online, all it takes is a few moments of your time. Go to a review or comparison sites and get a list of the most reputable installment loans UK direct lenders and ask for a quote so you will know how much you would pay back over the term you want. The best thing about this method is that you won’t be credit checked when you request for quotes from each lender. You will only be checked if you make an application for an online installment loan.

Applying for the best Installment Loans Online

Before you make an application from a potential online installment loan lender, there are some things that you need to consider first. This will help you get the loan deal that is comfortable to your finances and suited to your present circumstances. They include:

  1. The Amount – Remember the higher the borrowing amount, the higher your payment will be in the end since interest rate payments are fixed for every month. Be sure to take out an amount that eats a little portion of your monthly budget.
  2. The Length – While you have the freedom to spread your payments over a longer term to make them easily affordable, you will pay more in interest rates this way. This is because interest rates are fixed for every month.
  3. Payment Term – You want to have the flexibility to pay off your loan earlier in your deal so you can pay the loan back cheaper. Some lenders offer this kind of flexibility to borrowers and this is something that you may want to look into.
Installment loans bad credit

There is no “standard” borrower when it comes to installments loans. This means that borrowers can apply even if they have good credit or bad credit, with reputable online brokers like pickaloan.co.uk ready to cater both applicants.

With that being said, installment loans bad credit can be a great opportunity for people with bad credit, poor credit or no credit history to build their credit standing back to favorable standings. And because installment loans provide multiple payments over time, this can help reflect a history of good repayment for you – that is if you stick to your payments.

What are the Other Options Available?

If you need quick funding right away, there are an extensive array of options available, aside from installment loans online, that you can use to address different urgent finances. Some of the options available in the UK today from legit online lenders include:

  1. Payday Loans
  2. Personal Loans
  3. Guarantor Loans
  4. Logbook Loans
  5. Doorstep Loans

Depending on your need, you can look at any of the loan option mentioned above to satisfy different finances. Payday loans are easier to obtain with almost instant payouts making them perfect options for emergency situations. Personal loans and guarantor loans provide greater amounts and longer payment terms without you needing to put up any collateral to secure them. Logbook loans are secured on your vehicle and doorstep loans provide great convenience because it allows you to obtain the loan right at your very doorsteps.

Final Things to Consider

It is important to note that installment loans will vary in costs from lender to lender. How much you will have to pay will also depend on your credit score, whether the loan is secured or unsecured, among other factors. Responsible lenders like (website name) will allow you to get a rate estimate before you apply without it affecting your credit score.

Installment Loan FAQs


How does an installment loan work?

This is a long term loan that gives customers a chance to repay the loan amount every month with low interest. Lenders combine the principal amount borrowed with the corresponding interest rate. The total amount is then broken down to enable the customer to pay a certain amount every other month until the debt is fully paid for.

For example, if you wish to borrow 1000 pounds at 20% interest for 24 months, you be required to back 50 pounds monthly. This same principle applies to every other sum that you borrow.

Do I need collateral to get a loan?

Yes, most lenders will ask for some forms of collateral before they give you this type of loan. This is necessary because of the long duration of the loan and the low-interest rate involved. If you do not have substantial collateral, you can search for lenders who have other loan packages that may be of interest to you.

What happens when I default on a payment?

According to FCA rules, loan defaults are to be transferred to a debt collection agency who contact the borrower to collect the money. This process will drastically reduce the borrower’s credit score and his or her chances of securing credit in the future. In some cases, failure to make the loan repayment will lead to seizure or loss of property.

Will installment loan hurt my credit history?

No, taking a loan will have no negative impact on your credit score as long you play by the rules. Make payments when you are required to do so and you will be fine. However, if you fail to follow the loan repayment schedule, your credit rating may be affected and you may lose your property in the process.

We would advise that you should only borrow cash amounts that you can repay without having to disrupt your finances significantly. If you discover that you won’t be able to make repayments in a particular month, please contact your lender as soon as possible.

Can I run two loans simultaneously?

Most lenders will not allow you to run two loans concurrently as it is against public financial practices. But you can take advantage of other fast cash loans to solve financial emergencies that may come up while you are still repaying the loan.

While this may sound great, you will be better off repaying your current debt before you consider taking another one.

Can I get installment loans with bad credits?

There is a huge possibility that your credit rating won’t impact your eligibility to receive a loan negatively. There is no such thing as a perfect borrower, so you can always apply for an instalment loan whether you have good credits or not. But you must meet the lender’s laid down requirements before your application can be accepted.

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