When people are searching for loans on the internet many of them will find information about installment loans. These are not that well known and if you have not heard about them either, continue reading to find out more information about them. These are a style of loan that gives you a certain amount of money to borrow. When you agree to an installment loan, you are given a flat amount of money and then pay it back typically with a monthly repayment plan. What is different from types of revolving credit such as credit cards and lines of credit, you have to decide the exact amount that you need to borrow. Once you take out this amount you can not take out any further money. After you have taken the money, you will then make payments on the loan as negotiated over a fixed term between you and the lender. These payments are usually on a monthly basis but other terms can be negotiated if necessary.
People use these guaranteed installment loans according to Hummingbird Loans for things such as mortgages, auto loans, student loans, and personal loans. Continue reading below as each is explained below.
Automotive installment loans
These are typically loans that are repaid over a monthly installment plan that is agreed upon. The range of a car loan is typically between 12 and 96 months. That is the standard for these kind of loans but this is not always the case. People who take out long term loans will have lower monthly payments but will have higher interest and thus will pay more. People who choose to take out a short term loan will pay less interest in a shorter span of time and pay less. If you were to purchase a vehicle on a 48 month term you would pay much less then a 96 month term.
House mortgage installment loans
A home mortgage is another form of installment loan that is a method to borrow capital to purchase a home. People who use this option will have mortgages that are 15 to 30 years in length. The repayment plan will be on a monthly basis and they typically have a fixed interest rate, which means the principal and interest amounts do not change.
Reasons people get these include lowering their debt and taking care of sudden expenses they financially were not prepared for. A personal loan can have a range of months on a repayment plan. Many of these types of loans can last from 12 months all the way to 96 months. The longer the amount of time needed for repayment will increase the interest rates and how much you pay. Also, you do not have to put up collateral to acquire the loan.
The positive aspects of installment loans
A positive is that you have a payment plan that does not change. The amount of your debt does not ever fluctuate and you will never encounter unexpected fees or your debt getting larger like revolving credit. Usually your repayment plan will have the same amount every month until the debt is completely repaid on the loan. When you know how much you have to spend on your loan on a monthly basis, you will be able to budget your money for payments much easier. This removes any stress or hassles associated with taking out a loan. When you seek an installment loan, be absolutely sure you will be able to cover the amount that you need and can afford the payments. Feel good knowing that your debt will be paid off by a specific date. If you take out a loan, choosing one with a shorter repayment schedule will lower interest and will pay off the debt that much quicker.
The negative aspects of installment loans
One of the negative attributes of these loans is that you cannot take out more money on the loan if you need it. If you needed to take out more money, you would have to take out another installment loan. To prevent this problem from potentially happening, be sure that you take out the exact amount that is needed. Another problem with most loan stores is that they use credit rating systems. Fortunately, at our website we do not use any of the credit networks or bureaus. If you don’t have the best credit, or no credit at all we can still help you.