There are benefits to instalment loans that many are yet to be made knowledgable of. In fact, not everybody knows that instalment loans exist, and are a category that belongs under “personal loans”.
Here’s a brief overview of what they are, what you can do to apply, and more.
Instalment Loan: Brief Summary
Instalment loans that can be availed of online are exactly what their name suggests— they are “instalment” plans. In other words, your repayment option will be staggered.
Instead of paying in a complete and full lump sum, your lender shall have you follow a series of repayment dates. Added up and by the end of the said staggered plan, you will have already recompensed for the amount borrowed.
In general, the repayment amount (usually set in motion on a month-by-month basis) is fixed. And much like all other loan types, interest rates continue to apply.
The latter, along with other fees, will vary in amount depending on your lender and the repayment plan you agree to.
2 Basic Types of Installment Loans
Secured Installment Loan
A secured instalment loan is one that is availed of with the condition of you putting down collateral.
A “collateral” is a kind of asset that can stand as a “conditional”, a tangible “promise” to your lender in exchange for being approved for the loan.
Collateral can come in the form of your car, property, mortgage, equity, etc. In the event of late or the absence of a payment, your lender will have the right to acquire said promised collateral, in part or in whole.
Unsecured Installment Loan
In contrast to a secured instalment loan, you will know that its unsecured alternative does not require collateral. Instead, your lender’s guarantee of timely repayments will be in the form of your credit score and/or creditworthiness.
Online Application for an Installment Loan
1. Online Form
It is necessary that you complete an online application form. Besides recording your personal information, these forms shall have you answer financial-related questions for your lender to better understand your financial need.
To supplement this, it will answer what they can do to address the said need, and what their guarantee is that you will do your due diligence in following through with recompense.
2. Identification
Just as uncomplicated as the first step, present your identification documents. Typically, two is the minimum required for validation. Driver’s license, a copy of your passport, national I.D., etc.
These are all accepted modes of personal identification.
3. Borrower Review
Click here and see that with regards to unsecured instalment loans, the process will be fairly quick. Most online lenders offer this loan type to borrowers because of the convenience its accompanying process provides.
Once you submit your application, you will immediately receive a notification of when you are to expect a revert from your borrower telling you whether you have been approved or not.
And very frequently, as long as you have a steady source of income, you will be approved for the loan.
There are free online loan calculators (even on the website of your lending agency) that you can use to get a rough estimate of what your repayment amount will be, in parallel to the repayment period you shall observe.