Installment loans are designed in such a manner that the repayments are arranged over the course of years. They are cheaper as compared to the personal loans as the interest amount is spread over a greater number of years as compared to the personal loan and interest rate charged are usually smaller as compared to that of personal loans. You can learn more online about these types of loans.
Another difference between personal and installment loans is that the payment of a personal loan is usually made in a lump sum amount while in installments loan, as the name suggests, repayment is done in small installments. Installments loans can be very beneficial for creating a good credit history or improving a previously bad one. As you are given 1 to 5 years to make payments, you have a plenty of time at hand to repay the debt. Secondly, it makes easier for you to arrange installment amount as you know how much the monthly installment will be. You can also make arrangements with your creditor to fix installments to that amount that is feasible for you to pay back each month. But it becomes a tedious and time taking process to pay interest for such a large amount of time.
Installment loans can be taken for different durations and to fulfill different purposes like for purchasing a car, constructing or buying a house, to build a factory, to extend operations of a business or to buy other household appliances. Installment loans are usually secured by some kind of asset as collateral that can be acquired in case the borrower fails to repay the loan. But installment loans are difficult to get as compared to credit cards or other personal loans. Personal loan providers do not demand for the security and the process also involves less documentation. On the other hand, an installment loan is given to you after considering many factors like your ability to repay, your monthly income and it also requires some type of collateral as security. One needs to learn more online before going for a particular loan. You should only borrow the amount of money that you need. Installment loan providers offer large amounts of money as compared to personal loans or credit cards. This may urge you to borrow more than you need. You should only borrow the amount you really need and are capable to return.