Installments loans are one of the most popular types of credit. This is due to their usefulness and affordability. It is used to meet many different needs. It is the process of lending funds for a certain period at an interest rate specified in the contract.
Obligatory principles of crediting: urgency, repayment, and payment. An installment loan is provided to pay for consumer needs. They are used to purchase services and goods of long-term (car, apartment, furniture) and short-term use (food, personal hygiene items).
Payday Loans USA is issued by various institutions: banks, microfinance companies, and retailers. Money can be received both in hand and on the specified credit or debit card.
Types of loans by purpose
- Non-purpose. Money is spent at the borrower’s discretion.
- Purposeful. Taken for the purchase of certain goods and services:
- mortgages;
- car loans;
- urgent needs;
- the repair of housing, premises;
- medicine, tourism, and education;
- construction and purchase of housing, premises.
What is the duration of the installment loans?
- Short-term. It is issued for up to 1 year. Most often they are non-targeted, the interest rate is high, with a minimum of documents, no need to involve guarantors and collateral;
- Medium terms. These are signed for a period of 1 to 3 years. Usually, the target type is used, the interest rate is moderate, in this case, more documents are needed, guarantors may be involved or pledge may be provided;
- Long-term. These are issued for a period exceeding 3 years. Only the target type is used, the interest rate is low, along with this a significant list of documents is prepared, a guarantor or pledge is used.
What are the advantages and disadvantages?
Advantages include:
- Improved living conditions.
- An increase in a person’s ability to pay.
- Avoidance of loss of commodity supply.
- Acceleration of the sale of inventory and services.
- Avoiding a rise in the price of products in the long run.
- Paying for goods through monthly payments.
- Purchasing something at the time of greatest urgency.
What are the disadvantages?
- Because of the interest rate, the cost of the item will be greatly increased.
- The enjoyment period of the purchase will be over and you will have to make payments for a long time.
Installment loans are in great demand among different segments of the population. There are a significant number of different types of loans. However, the decision to take out a loan should be made after weighing all the advantages and disadvantages.
Microfinance companies value their reputations and clients’ information, so the organization takes the storage and verification of the information provided extremely seriously. Interested in applying for a loan? Choose the right option for you, for instance, Filld.
You can simply fill out an online application on the company’s website. To do this, you need to specify personal and contact information, select the amount of borrowed funds and the appropriate terms of repayment of the loan.
After that, in a few minutes, a manager will contact you to clarify the information and conclude an agreement. Borrowed funds can be used for the purchase of equipment, vehicles, goods, opening new businesses, etc.