Often people in unexpected situations need money. When deciding to take out a loan, they understand that there are many different loans and payments. First, you need to figure out what’s what. Let’s discuss what installment loans are. In essence, an installment plan is the same loan, that is, you also receive a product or service immediately on it, and you give money for the purchase gradually: in equal payments over a certain period. At the same time, unlike a loan, you do not need to pay interest on an installment plan.
For a complete understanding of the differences between a loan and an installment plan, you need to get acquainted with the loan overview and the features of such a service as an installment plan. Its main criterion is the issuance of any product with deferred maturity without additional commission. When buying something in installments, you need to return money over a certain period. By purchasing goods on credit, you will have to pay for every day of using the credit funds with additional interest. Another important difference between an installment plan and a loan is securing the obligations of the borrower to the lender.
Installment loans: what are they?
When using loans services, you can do without collateral altogether. Buying in installments, the product itself will act as a pledge, that is, if you do not pay the required amount on time, the lender can pick up the product, since the right to it has not yet passed to you. Installment plans are usually provided by selling companies, while loans are most often obtained from a bank or from credit managers directly in stores, which greatly complicates the process of obtaining approval.
What are installment loans: advantages and disadvantages?
In fact, both an installment plan and a loan can be beneficial for the consumer — you just need to decide on the best option for a specific purpose, taking into account all the nuances. What are installment loans advantages? The main advantage is that you can send an online application which can be approved very fast. Among other advantages are:
- Interest is not counted — it is not uncommon when this fact becomes the criterion when choosing between a loan and an installment plan, which plays a final role. But you need to remember about the additional costs required at the time of purchase;
- Almost instant registration and the simplest procedure for obtaining — to approve a loan application, you need to bring a lot of different certificates, statements and documents to the bank, and in order to take the goods in installments, you only need to have a passport. Also, most likely they will not check your credit history;
- The ability to quickly and without any problems exchange goods, if necessary, and ask back your money that you paid to the seller earlier.
But what are considered installment loans? Unlike a loan, which can be issued at any convenient time, it is issued by the store only during a certain ‘promotional’ period or at the individual request of the buyer. Most often, such promotions are a one-time measure to increase interest in the store and a way to increase the flow of customers to make purchases.
Always remember about late fees — one of the ways to ensure the fulfillment of obligations, namely in cash or other property, which the debtor must transfer to the creditor in the event of a breach by the debtor of the obligation.
Installment loans for bad credit
The main reason for the deterioration of the credit history is the violation of the terms of the loan agreement by the borrower. Even if a citizen took loans many times and repaid them without delays, and when repaying one of the last 3-4 loans allowed at least one untimely monthly payment, his credit history will not be ideal. Installment loans for bad credit is not a sentence.
If a customer is to blame for a bad credit history, who, as a borrower, violated the debt repayment terms of a financial institution, and not third parties, he has only one way to improve his credit history: to take installment loans for bad credit, purchasing new loan products and demonstrate the qualities of an impeccable client – to make loan payments on time.