Do you need money? Rhetorical question, because who doesn’t, right? But maybe you need it more badly than an average person because… let’s see… there are just so many possibilities. Whether it is for medical reasons, wedding costs, travelling, house remodelling or just living, there are situations that you just have to find a way to get some money. And soon.
I’m sure that the possibility of taking a cheap loan has passed through your mind more than once. And maybe, the reason that you did not go for it was that you were afraid of the terms that would make you pay back all the borrowed sum at once and after a very short period. If that is the case, you should consider the option of taking the instalment loan.
To put it simply – it is a loan that you take for a longer period than other cheap loans. You pay the loan back gradually over a set length of time. Exactly how much time you have depends on the terms of a contract, which is drawn for you after analyzing your financial situation and capability of paying back the loan. That way – theoretically speaking – paying back the loan should not be too much of a burden for your household budget. Depending on how much you want to borrow, paying the loan back can take a few months up to even several years. You can also set the instalments so as you’ll have to pay more in the beginning and less further in time.
When you decide to take an instalment loan you have to realize one thing – you will be obliged to pay back significantly more then you’ve borrowed. Sometimes you will have to pay even half of the sum you’ve borrowed additional to the money you’ve taken. It is called the interest, and that is how the providers make the loans profitable for them. In other words – you have more time, but you also have to collect more money overall. It’s difficult to compare the instalment loans with other cheap loans available on the market because the terms are so different.
But it seems that the instalment loans are in general more expensive than other kinds, but the way of paying back is considerably more convenient. So the question you have to ask yourself is whether you really need the sum you want to borrow right here and now? If you can live without it, it may be wiser to refrain from taking the loan. But life may offer you every kind of problem, and some of them can be only solved with money. If that’s your case as well, then go for it.
The documents you need to show to get the loan depends on what the provider decides. Many of them though want to make the formalities as minimal as possible. You will definitely have to show your ID and give such personal information like name and address and a social security number. But when it comes to the proof of income, there are few possibilities – some providers do not require any document, it is enough that you will declare your monthly income by yourself. Others will ask you to show them proof that you’ve paid your bill last month, or a copy of your work contract. In some cases, the provider will check your credit history – whether you’ve borrowed any money before and did you manage to pay it all back in time. Generally speaking, the more you want to borrow, the more documents you have to show in your application, and as a result, the verification process may take more time.
Do thorough research to gather all the information you can about the provider you’ve chosen. Find out if you can rely on him. And again, analyze your financial situation – make sure that you can pay back the amount you want to borrow plus interest. It is also a very good idea to confirm whether you can prolong the payback time should the need arise. Some providers even offer you a special deal where you can get the extension of the payment time free of charge.
On the other hand, in some cases, any changes in the payment schedule are impossible or will result in adding some additional cost to the amount you have to pay. That is why this issue is one of the most important when it comes to instalment loans. And remember that it matters how much you want to borrow and for how long. The higher the sum, the higher the interest, and it’s the same when it comes to the length of time you have to pay it back – the longer it will take, the more you will pay. You have to check as well whether it is possible to pay back the loan ahead of given time. You’d think that it shouldn’t be a problem, but that way, the provider would earn less, so not everyone allows it cost free.
Instalment loan seems to be an option worth considering when you need money and are at the same time afraid that you won’t be able to pay it back all at once. But when you are making a decision which loan you should take remember that your current financial situation may change, so the more flexible the conditions of the loan are, the better for you.