Bonsai Finance: Learn More About Installment Loans for Bad Credit, Poor Credit or Without Credit History
An installment loan is defined as a loan wherein a set number of scheduled payments is made in a specific given period of time. For example, Jane needs to pay $1,000 for an emergency medical expense. Jane took advantage of an installment loan that needs to be paid within 24 months with an interest rate of 25%. In an installment loan, Jane can get a check worth $1,000 and pay regular monthly payment of $53.37 for a period of 24 months. What is the difference between an installment loan from a payday loan? Generally, payday loans are short-term, with higher interest rate, and are usually paid back as a single lump sum payment on the borrower’s next pay period. In contrast, an installment loan usually last for many months and there is an even spread out of payments over the term of the loan.
Installment loans is the best option for people without a credit history, for those who have bad credit or poor credit, in order to help to build a good credit history. Installment loans are requiring multiple payments, helping in creating a history of repayment. A borrower’s payment history is reported to credit reporting companies or agencies, thus helping improve a credit score of borrowers with a good payment history. Now, Jane can establish a good payment history with the help of installment loans because of multiple payments. An installment loan is a good solution for those needing extra funds that beyond cash advance can offer. As compared to payday loans, installment loans offers more flexibility to borrowers because the borrowers can decide the length of time they need to repay the loan and the amount they want to borrow. A borrower can decide on smaller payments for a longer payback period or a shorter loan term with larger payments. Today, installment loans are not yet available in all states and there are some states that dictate the minimum and maximum loan amounts that a borrower can obtain an installment loan.
In an installment loan, there are associated fees and interest charges, and these fees and charges must be written and explained in the lender’s loan agreement, and notifications must be sent to the borrower if late fees apply if ever the borrower is unable to make payments on time. It is important to be aware the lenders must express all charges and fees in dollar amount including the annual percentage rate (APR). Make your credit standing positive by getting an installment loan today, to help establish your good credit history, so talk to us now and we will help you out! Instalment loans can be your best option in times you need to establish a good payment history, and we can be your partner!