Many people borrow money and do so for all sorts of reasons. But there are some loans which borrowers do not know much about and they may even avoid considering them because of this. It is well worth finding out about all types of lending so that if you do need to borrow some money you will have an idea of where to go in order to do so. It is probably the newer types of loans that are less well-known. Perhaps things like instalment loans. You may even wonder what on earth you can use them for.
What are instalment loans?
An instalment loan is a type of short-term loan. You will not find them offered by traditional lenders though as they are also a no credit check loan. This means that they are offered to everyone, including those that have a poor credit record. This can be very useful as if you do have a poor credit record and need money there may seem to be nowhere that you can get help. But these loans could be useful for you.
An instalment loan tends to be to the value of a thousand pounds, although you can borrow smaller amounts if you wish to. The loans can be organised very quickly, sometimes just within a few hours. This means that if you do need money quickly, you will be able to get it with this sort of loan.
One of the most well-known types of loans is a payday loan but many people are put off using this type of loan because they fear that repaying all of the loan in one go is going to be really difficult for them. This is where instalment loans can be favoured. They have repayments in instalments which makes them easier to manage and therefore there is less concern about managing those repayments.
What can they be used for?
With some types of loans there are specific purposes that they have to be used for. This can include things like mortgages and student loans which are used to buy homes or university courses. However, there are also many loans where you can use the money for anything you wish. An instalment loan will fit into this category.
This means that you do not have to worry about what you are using the money for. The lender will not ask about what you are buying with the money. However, the loans do tend to be for smaller amounts of money and therefore you will be limited somewhat to the things that you will be able to spend it on. You will not be able to afford expensive things but you can still choose what you might want to buy with the money that you have.
However, just because you can use a particular loan for any purpose, it does not mean that you necessarily should. These short-term loans, for example, are designed to be used in emergencies and many other loans are also like this. If you need money to pay a bill, buy food or something like this and have no other option but to borrow then this could be a circumstance where they could be considered. However, if you have savings or can wait before you spend the money then it could be better to wait rather than to pay for a loan.
It is also extremely wise to make sure that you will be able to afford the repayments on the loan. Even though you get to repay in instalments, so the repayment should be easier, it does not mean that it will always be easy for you. The amount that you have to repay will vary depending on how much you borrow and which lender you choose to use. This means that you should think hard about this before you borrow. Find out form the lenders how much you will need to repay if you borrow from them. You will often find that the lenders have a calculator where you can work this out, but you can contact them to find out if they do not have one or if you are not sure how to use it. Once you know how much you will be expected to repay each month you will be able to calculate whether you will be able to afford this amount of money. You will need to have a close examination of your financial records in order to do this. Look back at your bank statements and you will be able to see whether you will normally have enough money to be able to afford these loan repayments. If you think that it might be a struggle then it could be wise to borrow less or choose a lender which has repayments that you can afford.