It is common for a lot of us to engage in a financial crunch at some point in life. |
Beginning from having difficulty in paying the bills to run short of expenses, every household has a different story of their financial journey.
This is where online loans can jump in to rescue our problems.
There are different kinds of loans offered by financial institutions.
Depending upon your ability to pay to pack the loan, you can choose a particular loan that you can easily payback after a specified time.
When it comes to instalment loans, one has the privilege of paying over a few months as one is not bound to repay the entire amount within a few hours.
However, one of the most common mistakes that a lot of people make is, they don't settle for the right type of instalment loan.
If you need to know about an online company that provides convenient loans to the customers, visit the Personal Money Network now.
Their website is user friendly and can be navigated easily.
Going through their loan options will give you a perspective on this loan type.
Regardless of what you read in most online articles, there will always be confusion in your mind regarding online instalment loans.
So here, in this article, we will guide you through the pros and cons of instalment loans.
Continue reading until the end:
Pros of Installment Loans
1. Easy to Cater for Small Installments
This is one of the leading advantages of online instalment loans.
Because you get a lot of time to pay back the original amount, it is easier to break the total amount in several parts and pay over an agreed period.
This means, paying back the money will not take a big toll on the borrower's finances.
Not to forget, paying back for loans can be very difficult if you don't have enough time.
Some people start borrowing, even more, to get rid of their current situation.
2. Easy To Apply
Unlike conventional loans where you need to visit a bank and go through an archaic procedure to apply for a particular amount of money, applying for an online instalment loan is easy.
This is because mainstream online loan providing companies do not take a lot of time in approving or disapproving the borrower's request.
Especially when it comes to instalment loans, you can never expect a delay of days or weeks at all.
This is the reason why people suffering from large expenses such as a car or wedding, apply for this kind of loan.
Secondly, when you apply for an instalment loan, it is usually offered at a lower interest rate.
This makes it convenient for everyone regardless of their financial situation.
3. Fixed Payment
Because the interest rate is fixed, borrowers know exactly the amount they need to pay every month.
This way, they will better be able to manage their finances. Secondly, there are no hidden expenses involved when people are paying back an instalment loan.
Contrary to this, if you settle for a conventional loan offered in the market, you will have to pay back a higher amount of money in return.
Most financial institutions don't inform clients about the hidden charges that make up a large part of the payment.
4. No Discrimination
Irrespective of the credit history, everyone is eligible for an instalment loan.
One of the leading reasons why a lot of people are rejected after making a loan request is because of their poor credit history.
However, when you settle for an instalment loan, the company will not discriminate between you and another person whose credit history is way stronger than yours.
Cons of Instalment Loans
Now that you're convinced with the mind-boggling pros of instalment loans, it is imperative to know the other side of the story.
Here are a few cons of instalment loans:
1. The Features of a Payday Loan
Not to forget, there are several financial institutions online that offer instalment loans to the customers.
A lot of them are often engaged in adding the features of a payday loan. For instance, many people complain of an excessive interest rate.
You will be shocked to know, in payday loans, the interest rates can go up to as high as 1000%.
So beware of the specifications of an instalment loan and read the terms properly before settling for an offer.
2. Hidden Payments
Luckily, an instalment loan can easily be paid before the actual ending date of the loan term.
Therefore, anyone who can pay back the loan before time should do it as it can save them from paying too much interest.
However, a lot of negative loan providers tend to add hidden charges that are the consequences of paying back before time although there is no logic in charging a customer with an additional charge if he/she manages to pay before time, a lot of institutions do it.
3. High-Interest Charges
As discussed, one of the leading problems of installment loans is higher interest charges.
In some cases, people end up paying a much larger amount of money than what they had originally borrowed.
So the longer it takes you to pay them off, the higher will be the interest amount put together.
This is why, as a borrower, you need to be careful when agreeing upon terms and conditions set by the loan providing company.
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