All the signs are pointing towards an economic recovery for the UK; Growth is up, unemployment is down and some of us are slowly starting to feel as though our finances are improving. Despite this, many household budgets are still feeling stretched meaning the need for additional finance in the form of loans and credit cards is still there. One particular type of loan that is proving quite popular nowadays is the instalment loans.
Different people have different ideas as to what an instalment loan actually is. Generally though, instalment loan lenders will offer between £300 and £2,000 which is repayable over a term of 3 to 24 months – depending on the amount borrowed. Throughout this article we are going to discuss how taking out an instalment loan could be beneficial to your finances.
1. Flexible on purpose
Instalment loans are a type of unsecured loan which means they can be used for almost any personal purpose. The loan amounts on offer make them perfect for those looking to consolidate payday loan or credit card debt, pay for important car repairs, make much-needed home improvements or spread the cost of a large purchase like a laptop or TV.
2. Repayments to fit your budget
As the applicant you are able to stipulate the repayments to fit your monthly budget. Having decided on the amount required (based on your purpose of the loan) you can then use the sliders on a lenders website to choose your most suitable loan term. By spreading the loan over a longer term you will notice that the monthly instalments are lower but the total repayment amount is higher – it all comes down to your disposable income level. If possible always try to choose a shorter term loan as this will mean your total cost of credit will be lower.
3. Poor credit history considered
If you have a poor credit history then it’s likely that you’ll be turned down for loans via banks, mainstream lenders and even manufacturers financing (i.e. PC World). Instalment loan lenders are able to consider applications from those with a poor credit history or indeed no credit history. While the rates offered will be considerably higher than those offered by the banks, by proving that you can competently repay these rates, you vastly improve your chances of being accepted for low rate credit in the future.
When money is tight it can be tempting to turn to the well-advertised payday loans, while these may offer a short term fix to your problems, they should never be considered as a long-term solution. Instalment loans on the other hand can be used as a long term solution. The majority of lenders are now based online meaning the application is quick and the loan can be paid out the same day as you apply.