Are you in need of cash and looking at the various ways that you can borrow it? You may be leaning towards getting an installment loan, but not quite sure if it's right for you. Here are some of the things that you should know about installment loans before you make a decision.
Installment Loans Are Easy To Get
You'll find that an installment loan is fairly easy to get, even if you do not have the best credit score. The application process tends to require that you provide a lot less installation and that you can be approved quickly. This is the opposite of a mortgage, which can take months to be approved.
Installment Loans Have Fixed Monthly Payments
People tend to like installment loans because the payments are predictable. You'll actually have fixed monthly payments over a defined period of time. This allows you to know exactly how much you need to budget to pay back the installment loan. You won't be hit with a surprise balloon payment or interest rate change down the road.
Installment Loans Have Fair Interest Rates
Mortgages and credit cards tend to have the lowest and highest interest rates respectively. An installment loan ends up falling in the middle, which makes it a viable alternative to financing a purchase with a credit card. The installment helps ensure that you are not paying too much in interest in the end, which makes it a smart choice.
Installment Loans Can Have Origination Fees
One thing to pay attention to when applying for an installment loan is if there is an origination fee for getting the loan. An origination fee is what you pay for the lender to simply provide you with a loan, and it is in addition to any interest that you owe. Having a large origination fee to get a loan can sometimes make a small loan impractical. You need to understand what the origination fee is if it exists and factor it into the total cost of the loan.
Installment Loans Can Be Paid Off Early
It is very common for installment loans to be paid off early if you have the cash on hand. This means that you can save money on the interest you pay on the rest of the loan. However, you'll want to ask if there are any early payoff fees, and what you can do to avoid them if they exist.