If you are in dire need of cash or money and you don’t have much time to spare, monthly installment loans may be the option for you. These are short-term loans that are often used by individuals who cannot afford the monthly payments for other types of loans. Monthly installment loans have an advantage over payday lenders because they allow borrowers more flexibility in their repayment schedule.
Here you can find out everything you need to know about the monthly installment loan and how you can take advantage of it.
What is a monthly installment loan?
We’ve already mentioned a brief introduction to monthly installment loans, but we’ll go on to explain how it works. A monthly installment loan works through monthly repayments over a fixed term. The borrower repays the monthly installment in full at set intervals on the due date of each installment. Otherwise, they will be penalized with additional interest.
How to apply for a monthly installment loan
If you are interested in a monthly installment loan, you can apply for it online. What you need to do is search the available lenders and submit your application with all the required documentation they need. For a more detailed step on how the loan application process works:
- Look for a reputable and licensed moneylender.
- Before speaking to them, do some research on the lender first.
- Make an appointment to proceed with the application.
- When you arrive at the office, fill out a form and submit the required documents. This can vary from lender to lender. So read the application process carefully before applying. Some lenders also require your credit rating for additional interest rates.
- After approving monthly installment loan applications, the next step is to agree payment plans with your chosen monthly installment loan company. You can do this online or by phone call, depending on which option they offer. After you’ve chosen your preferred monthly repayment duration (either 12 months or 24 months), prepare for it by reading our “Things to Remember” section below and other important frequently asked questions about Monthly Installment Loans.
What are the advantages of monthly installment loans?
The advantages of monthly installment loans are the monthly repayments that have a fixed term. This means that borrowers can better manage their monthly expenses with monthly installments rather than incurring large monthly debt in a single payment. Here are the other advantages of monthly installment loans:
- Credit institutions with monthly installment payments offer the flexibility to repay monthly or in full on the due date. This is an advantage only monthly installment loan payments can have over payday lenders who do not allow borrowers to pay anything outside of their monthly repayment, whether or not they can afford it that month.
- Monthly installment loans are cheaper in the long run because borrowers don’t pay additional interest and fees for late payments or skipped monthly payments like payday lenders do.
Is a monthly installment loan the right option?
A monthly installment loan is only intended for those who urgently need money and do not have a lot of time. If you are looking for long-term monthly debt, monthly payments may not be your best option as more financial options may better suit your needs, such as personal loans or credit cards.
In addition, monthly loan lenders often require borrowers to make monthly repayments on other types of loans in order to approve their applications. That said, if you already owe payday creditors but want to apply for monthly installment loans instead, you need to settle with them first before providing payment plans with monthly repayment terms that suit your situation.
Tips on Avoiding Debt With These Loans
A monthly installment loan is a form of high-yielding monthly debt. It is important to find out whether the monthly repayment terms are the best choice for your financial situation before submitting your application so that you do not go into debt with monthly repayments that may no longer be affordable in the future.
To avoid missing out on repayments, here are some things you should do:
- Prepare monthly payments in advance.
- Keep your monthly payments manageable and realistic, don’t over-spend.
- Seek help from a professional financial advisor or someone you trust to help with long-term monthly repayments if needed.
Monthly Installment Loans: What To Look For
Some of the things borrowers should consider are their creditworthiness, monthly income, expenses, and debt levels, and the current monthly payments they owe before applying for a monthly payment loan – but most importantly, whether the loan can be repaid within of 24 months so that the interest on it is not too high.
It is also important to note that monthly loan lenders often require borrowers to repay other types of credit monthly to approve their applications to settle with them first before providing payment plans with monthly repayment terms that suit your situation.
Remember, with a monthly installment loan, don’t be fooled by the affordability and flexibility of monthly payments. If you can’t afford the monthly repayments, or if you can’t pay off the debt within 24 months, avoid getting into debt as the interest rates that are higher than those of short-term loans such as payday loans can also result.