What Are Installment Loans And Why One Needs It

We all know that there are different types of loans available in the market, as per the need of the borrowers. At present, the installment loans are very much in demand. Installments loans are a form of loan in which a series of scheduled payments are provided over time. For instance, Tom needs $2,000 for some emergency. Tom goes for installment loan which he can pay back (original amount + 25% interest rate) in the next 24 months. In this type of loan, Tom will instantly get a $2,000. He can pay every month a payment of $106.74 for the next 24 months, regularly.

Payday Loans vs. Installment Loans

The new form of lending is getting really popular in almost all parts of the world. The Installment loans UK has surpassed the payday loans scheme. The payday loans are usually provided for a shorter period of time with high rate of interest. The applicant has to pay back the amount in a lump. In contrast, the installment form of loan payments is spread out making it easier for the borrower. Hence, payday loan borrowing is facing decline because of the shift of the borrowers to the installment loan scheme.

Supports Bad Credit

This form of lending in installments is very much used to build a good credit by all those borrowers who have a bad credit history or absolutely no credit records. Since, it is easy to get and convenient to pay back with a reasonable amount of rate of interest, it can help all those lenders who are waiting for an opportunity to improve or build a good credit records for future references.

Therefore, if a person is looking for instant loans that can fulfill their immediate needs, but are afraid of high rate of interest and paying back the loan amount in lumps, then the installment loans are the best way out for them.