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What is an Installment Loan?

The ever-increasing cost of national expenditure has made people breathe heavily to manage the standard of living and making ends meet. The only solution left out for survival is to seek external financial assistance in terms of installment loans, which you can explore more at Planet-Loans.com.

What is an Installment Loan?

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Any type of credit, which is paid back over a certain period of time on a fixed schedule is known as “Installment Loan”. The function is to divide the cost of a large purchase over a time period so you can have the item upfront. It helps for bad credit users to consolidate their debs to bring harmony between your existing financial state and your devouring demands.

There are many advantages to taking it. They have predictable monthly payments, so you can budget money well. They also have early repayment options. Plus, they have a low-interest rate and the opportunity to use them as a tax deduction.

For better understanding, we have examined the most common types of installment loans for those looking solely to build credit. Mortgage, personal and auto loans are some of the most common examples.

Key Features

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  • Fixed Payment

A fixed payment is the amount of money you are required to pay toward the installment loan on a regular basis. For instance, when you have a mortgage you pay off a 30 year fixed loan with a set of monthly payments that gets applied toward the principal, interest, taxes, and insurance. That is why credit cards are not because the monthly payments are not fixed.

  • Lowest-Interest Rate

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The interest rate on an installment loan affects both the fixed payment as well as the financing costs over the life of the credit. The lending term is the length it takes to repay. Most commonly the loan on a mortgage is either 15 to 30 years. Auto and personal loans are much shorter in terms of the repayment period.

  • Collateral Damage

One of the key features of an installment loan is whether or not it is secured or unsecured. A secured installment loan like a mortgage, auto, or boat, requires that you put up collateral to get financing or a more reasonable interest rate. If you fail to pay the creditor can repossess the property you put up as collateral.

Unsecured credit does not carry the risk of losing the property because they do not require you to put anything up as collateral. If you default, you can risk a negative impact on your credit score. Personal loans are often unsecured. To get a good interest rate on an unsecured loan, you typically need to have good credit. When you have a good history of paying off debts, it can play a big role in whether or not you are approved for an advance.

Factors to Consider Before Applying

Before applying for installment loans for bad credit, you should have considering the following factors before applying for an installment loan, as these tips might be useful:

  • Search Wisely For Lenders – You first need to consider a number of lenders. The number of installment lenders in the market has greatly increased and finding one to offer you the loan should not pose a very big challenge.

However, it is not advisable to rush into a deal with the first lender you come across without actually comparing what other lenders have to offer. This is a move that should help you find lenders who charge affordable interest rates for the advance.

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  • Review Your Credit Rating – You should also review your credit ratings prior to submitting a credit application. Most credit reports are less impressive simply because of errors in them. So prior to submitting your application, you should grab your report and look for any errors that it may contain. If you notice any, it is important to have it corrected as this may lower your interest rates.
  • Don’t Over Borrow – You should avoid over-borrowing. The more you borrow, the higher your interest rate is likely to be. So to avoid paying more, you should only borrow what you actually need. This type of financing would also not be suitable for things like funding vocational trips.
  • Payback Duration – The duration you are given to repay the loan is also very important. With installment loans, you can have up to a maximum of five years to repay. However, the faster you repay it, the better. As such, it is advisable to repay your credit within a year if you can manage to raise large monthly installments that accompanies it.
  • Deal with Legit Companies – When looking for this type of loan, you must also ensure that you only deal with legit companies. Make sure you verify the lender’s details from the government authorities. This is very important, especially when borrowing from online lenders. You can also search on the internet for any reviews or complaints made against the said lender. This will help you know how the company carries out its business and how it deals with clients.
  • Terms & Condition – Other terms and conditions of the service are also very important. For instance, you must consider if there will be any penalties should you decide to clear the loan in one installment. You must also understand if there are fines for defaulting and try to avoid them. All these will go a long way in determining how much you repay and must therefore be taken very seriously.

Conclusion

A poor rating should not stop you from reaping the benefits of installment loans and any other type for that matter. The most important thing is to ensure that you understand everything you need to know about the credit before making a decision. In fact, bad credit can actually help you improve your rating if you make all the repayments in time.

10 Common Cash Loan Scams & How to Avoid Them

Fraud is constantly happening around us, and it is becoming an increasingly common phenomenon. The reason for that is the great development of internet companies and among so many companies there is always a certain number of scammers that people should pay attention to. However, how to protect yourself from such types of fraud?It is a question that has plagued a large number of people, but we have the answer to it. Since most of the work is done over the Internet, a lot of sites are not legitimate and they are just a danger that is constantly lurking. Such an organization steals from people both money and personal data. In this way, without your knowledge, they impose loans on you, and by the time you realize this, the debt is already so great that you cannot repay it.

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On the other hand, there are those who do not stop annoying people through various ways of communication such as calls, messages and more. In the end, they did exactly the same as the previous fraudsters. Don’t allow yourself to find yourself in the role of a victim of loan scam, and we will explain to you below how to avoid them.

Scammers use various tricks to entice you to fall prey to their offers and thus take away all your money, some of the most common attempts they use are:

1. Payment in advance

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As much as this may seem to you exclusively as a harmless compensation that the lender can reasonably ask of you, be careful. Why do we say that? We advise you for this reason because this can only be the background of some illegal action. Isn’t it suspicious that someone there is asking for money without prior service?

You will agree with us that it is by no means logical to give someone money while asking them for a loan. If you come across something like this, 99% is a scam. Those real lenders will expose you to all the fees and the future process in advance, and generally nothing is paid in advance.

2. Offer via telephone

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Did you know that it is not legal to offer loan over the phone? If this happens to you, by no means be gullible. Any type of offer must be exclusively in written form and in no other way. It must also contain all the necessary fees.

3. Wire transfer

Before any cooperation, check who you are dealing with. You need to immediately look for the address of your lender and investigate with the help of a lawyer or financial regulations who you are dealing with. This means that you need to make sure that the lender is doing the job legitimately. It is a sign of alarm if you have not done anything, and he asks you to hand over some kind of compensation. This is an alarm to do what we advised you to do.

4. Failure to check your credit rating

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Every lender that does legitimate work will first check your credit status. This assessment refers to checking the possibility of cooperation, because if you are not creditworthy, you will not be a suitable candidate. On the other hand, if you have communication with someone who is not interested in your creditworthiness at all or approves your large loan – this is not good. They are probably not legal business and you have nothing to do with such a lender for your safety. The only exception may be rapid cash offers and you can click here for more info.

5. Suspicious name

The post office box address of the lender is very suspicious. Experienced scammers often use the names of other companies or use their locations to look authentic to you. Don’t fall for something like that, but check immediately with the help of companies that deal with this, and they will confirm everything you need to know.

6. Personal information

You know very well that the main target is the personal information of many fraudsters, not only when it comes to credit, but also everything else. However, this is a good reason for them to ask you for something like your personal data. Of course, you will not have your social security number, account number, etc. give it to anyone, so don’t trust a potential lender right away.
Before you take any step in cooperating with him, first check if you are dealing with the right one. Our advice is to provide such information exclusively to a credit institution for which you have all the evidence that they are operating legitimately.

7. State registration

This is another way you can detect a scammer. More precisely, before entering into a business relationship, you can always check in your state where the person is registered. Every lender must do this if they are legitimately engaged in loan intermediation. Of course, you need to take more steps to make sure you do business with the right people, but this is definitely one of them that will bring you closer to the truth.

8. Reviews

Reviews are a great thing that can say a lot about something. Look at it this way … When you want to watch a movie or go to a new restaurant, be sure to look at the reviews and mostly decide on that. On the other hand, it doesn’t hurt to watch a bad movie or make a mistake with a restaurant. However, if you do it for less important things then imagine how much you risk with important things like money or personal data. If you make a mistake, the damage is huge and sometimes irreparable. Focus on reputable lenders, and you can do it very easily – via Google or social networks. Today, at least, it is very easy.

9. Customer Service

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Try to find customer service, and if it does not exist, then it is a very suspicious. It is best to bypass such companies, and don’t even settle for bots. Every respectable company in this business has this service and all the necessary answers to questions as well as other additional information.

10. Red flags

These are some more warning signs that we haven’t listed, and you may not notice because they are very small and sometimes negligible. However, open both eyes in this case and keep in mind that serious lenders will never make stupid mistakes. These are errors like spelling, punctuation, or grammar. This is simply not professional, and that raises doubts as well.

Conclusion:

We hope that this text has helped you see ways in which you can avoid all the pitfalls that lead to loan scam. It is important that you adopt our advice, because today fraudsters are finding new ways every day, as internet technology develops more and more.