If you are facing some serious financial issues because of the introduction of unexpected expenses such as unexpected travel, accidents or medical emergency, home renovation or car repairing, purchase something you need in your work.
There are many ways you can get instant cash for recovery whether you borrow money from your friend or applying for loans. If your friend won’t be able to help you then you should apply for a loan.
The loans are available in various forms like mortgage loans, auto loans, credit cards, doorstep loans and many more. There are many ways to get instant pounds but installment loans are far better than any other option. Let’s understand more about it and why this is the best choice for you.
What are Installment Loans?
This loan considers the borrowing amount with interest rate. And you have to repay the total amount over a set time frame. The time is basically considered as monthly in most of the cases. And you can borrow money for more than 6 months.
To get approval, lenders may ask you for some type of collateral or stable income source.
Generally, your credit score may impact your overall interest rate. If you have a good credit history then you may get some benefits. It would be better to confirm your credit score before applying for this loan.
Furthermore, there are 4 common types of installment loans:
- Mortgage Loan
- Auto Loan
- Student Loan
- Personal Loan
Why you choose Installment Loan?
You read earlier that there are several types of loans that are paid in instalments. For instance:
If you are a student and you want to study further, then you can opt for student instalment loan. This means you are getting a loan for a longer period with competitive interest rate. And you can repay the amount plus interest in a set time frame.
In this way, you can easily manage the loan without disturbing your budget. There are so many benefits of this loan. Let’s have a look a few more of them:
- Repayment Time
You read in the last paragraph that you can repay the amount in a certain amount of time. If you find any lender who is providing you for the short term but your financial condition won’t allow you then you can ask the lender to give you more time to pay it off.
- Chance to improve Credit score
This one is the major advantage of installment loans; you can improve your credit score fast when you pay the amount with interest every month.
- Less APR
Here, if you show any guarantor or collateral then you will get easy loan approval with less interest rate. You can get more benefits if your credit history is good.
- Secure Interest Rate
Apart from getting a loan in a lower interest rate, the one more benefit is never changing interest rate. The interest rate is irrespective of the market; it means, it will not be affected by any market changes.
- Fixed Monthly Payment
This benefit is the reason why most of the customers choose this loan. Here, you have to do monthly payments which will not disturb your monthly budget.
You can apply for both short and long term installment loans. If you need pounds to recover emergency expenses or want to do home renovation. You will get easy loans from direct loan lenders in the UK.
Prerequisite for installment loans
You read above that how this type of loan gives you different benefits. But online lenders analyse many things before you get approval for your application. Let’s see what factors they include to give loan approval.
First thing, you have to find a trusted lending agency. Then read the following points to check whether they reject or approve your application
- Credit score
The lender will check your current credit score and there are many websites where you can check your credit score. If you have excellent or good credit score then the lender doesn’t find any risk to provide funds. But if you have a poor credit score then you have to improve that.
Here, don’t confuse that with the bad credit score, you will not get approval. You can, but you have to present someone with a good credit score as your cosigner.
- Your Debt to Income Ratio
You can check your DTI ration manually, calculate all the debts and other bills and divide it from your monthly income. If it does not exceed 35% then you have a great chance to get approval.
These are the points that are necessary to get loan approval. If you do your work in finding a legitimate lender, then an installment loan can be the best option for you. You can easily add this to your monthly budget and pay it off without any anxiety.