Do you need to apply for Installment loans? Well, there are things that you should consider before you apply for Installment loans. In most cases, Installment loans are usually the best fit to sort out your emergency need.
For instance, let’s say that your son or daughter falls sick suddenly, and you don’t have health insurance or cash. The idea that ticks in your mind are to search for a Installment loan lender—who will send you your funds as soon as possible.
However, there are factors you should consider before you can get to apply for those loans. But first, I need you to understand the theory behind Installment loans.
So, What are Installment loans?
Like the name portrays, a Installment loan is a loan that once you apply, the lender will credit your account within that same day. Installment loans are the best when it comes to catering to emergency bills. Everyone applies for a loan to get the cash ready as soon as possible.
Now, what should you consider before applying for a Installment loan?
1. The interest rates
Yes, interest rates should be the first among your considerations before you can apply for an Installment loan. Remember that many Installment loans have very high-interest rates that will translate to paying high amounts.
However, before applying, you may compare different rates and eventually land to the cheapest one if you consider the interest rate. For instance, once you apply for a payday loan, you will get it the same day, but you will repay with an APR of not less than 390%. So, do your maths before you fall into a trap.
2. Do you need a loan?
Again, please consider this fact before you apply for an Installment loan. You should only apply for a loan if you have an emergency need. Otherwise, applying for an Installment loan while you have no emergency will be a bad idea.
Some people say that you can take a loan to go for a vacation. Well, it’s good, but it’s always a bad idea. If you need to go for a vacation, you can focus on saving money for that. Therefore, taking a loan should only be for emergency purposes that cannot wait till you get money.
3. When will you repay?
The loan repayment term is another that you should consider before applying for a Installment loan. I know that the application process is usually easy than the repayment process. For instance, it will take a few hours to receive a payday loan, and you will repay it in two weeks. In addition, the lender requires you to refund in total—both the loan amount and the interest accrued.
Some Installment loans are short-term, while others are long-term. That’s why you should ensure that you will repay the loan on the date that the lender sets. If you feel that you cannot repay at the agreed time, then take a small amount or evade taking the loan at all cost.
4. Will you afford to repay the loan?
This is yet another factor that you should consider when applying for an online installment loan instant approval. For instance, payday loan lenders will require you to repay the loan amount plus interest in two weeks. So if you take a payday loan, will you afford to repay it?
In addition, if you take an installment loan, will you afford to pay the monthly installments that the lender sets? If not, it will be a good idea to take a smaller loan that you can afford. However, the loan term and the interest rate determine the amount you pay on each installment.
5. What are the consequences of defaulting or late payments
Just in case you don’t repay the loan on time, what are the implications? Remember, if you had taken a secured loan, the lender would repossess your property. And you stand to lose both the money you had paid plus the property.
Some other unsecured loan lenders can compromise your credit score if you don’t repay them on the agreed time. Others will threaten to sue you, but they don’t usually act on it. After that, however, you will have no peace.
So, you better be careful about the consequences of late payments or default. In addition, ensure that you read the lender’s terms and conditions before you sign to take a loan.
Before taking a secured loan, ensure that you follow the factors mentioned above, and I’m sure you will make the best decisions. Remember that you can still focus on creating more income sources because that’s the only sure bet towards staying out of debt
In addition, if you start having money-saving kits for emergency needs, you may not even need to take out a loan.