There are lots of different ways that you can borrow money and it is a good idea to think about which will be a good option for you. The problem is that we have different borrowing needs at different time. We are likely to only need a mortgage once, for example but we might use a credit card all the way through our life.
Therefore, it can be good to know a bit about the different borrowing options that are available. Then we will be able to think about which might be the best in particular circumstances. So, if you are considering an instalment loan, for example, you will need to know what the main features are and what sets them apart from other loans and then you will be able to decide whether they will suit your needs at that particular time.
Main Features of Instalment Loans
- Quick to arrange – instalment loans are really quick to arrange compared with many other loans. It can sometimes be possible to get the money into your bank account within a few hours of applying for the loan. This can be a lot quicker than if you use a traditional lender as they could take days, weeks or even months to get you money. Obviously, you would need to check this out for yourself. Some lenders will always be faster than others and you will need to check which will offer this very quick service if you need the money urgently.
- No credit check – With an instalment loan you will not need a good credit score in order to qualify. Most lenders will look at your credit report and will only lend to you if they feel that they can trust you to repay. They will look and see whether you have had loans in the past and if you have managed to repay those. They will also look at whether you have an income and if you make regular payments, so that they can judge if you can make loan repayments. This will mean that if you have had any problems in the past or in any other way do not fulfil their criteria then you will not be able to borrow from them. With an instalment lender, they will not worry about these things. They will glance at your credit report but they will lend to you even if you have a poor credit history.
- Borrow small amounts – an instalment loan tends to be for £100-£1,000. This is a relatively small amount of money compared with many other lenders. This means that you will be able to just borrow a small amount. It can often feel a lot easier to just borrow a little amount as you will be confident that you will be able to repay it and you will know that it will not last very long.
- Repay in instalments – there are similar loans to instalment loans called payday loans. These have all the same features as above, but they need to be repaid in one lump sum. This can have advantages for those that want to pay off the loan really quickly, but repaying a large amount could be difficult. An instalment loan will allow the loan to be repaid over a few months. This means that it is easier to manage the repayments.
Whether the loans are a good idea for you will very much depend on what you are looking for in a loan. It is good to know that can be arranged quickly, that they do not require a good credit record, that you can borrow small amounts and that you can repay in instalments. These features can be different to other loans that you might be considering and it is good to know that you have this options which will stand out.
It is therefore really important to make sure that you are choosing the right loan for your specific situation. You need to think about exactly what you need from the loan and then match it to the loan which will be closest to your needs. If you know what loans are available and their main features then you will be able to work out which would most closely match your requirements. It is a good idea to think about this ahead of getting a loan. If you already know what options are available to you, then it will speed up your decision. If you need money quickly, then you may be in a panic and need to make a fast decision and if you have this knowledge then you are less likely to pick an option that is not suitable for you. This will make your borrowing experience much more positive and more likely to be a success.