Before getting into details about installment loans on bad credit, you need to understand that this loan is a fixed amount of money borrowed and then repaid in equal increments on a regular basis at fixed intervals for the decided time.
How to Choose an Installment loan?
Once you have decided to opt for an installment loan, the listed tips can help you take the right one.
- Compare the Rates of the Different Loans:
The personal loan that works out to be friendly to the consumer is with annual percentage rates of 6% and 36%. It is always advisable to compare rates for the unsecured personal loans. This can help you choose a lender who offers the lowest rate.
- Understand the Different fees:
Some lenders charge a fee known as the origination fee. This works out from 1% to 6% of the loan. Other lenders charge a fee known as the prepayment fee. This fee is for the early repayment of the loan. Make sure the lender discloses all the fees before you take any loan.
- Explore the Different Perks offered by the Lenders:
Some of the lenders can offer features specifically tailored to your requirement of the loan. If you have chosen debt consolidation, some of the lenders take the trouble to send the funds to the creditors directly, while the others offer a hardship plan or change the due date according to the financial picture.
- Choose a Term that is Manageable:
The best term of repayment is the one that can help you manage the monthly payments. This monthly payments need to be calculated based on the length of the term chosen. You can then decide what is manageable.
How can Installment Loans affect your Credit?
The loan can help your credit but this depends on totally how this is used. This can work as an opportunity for improving your credit. Making your payments on time shows your financial responsibility. You credit score suffers when you make a late payment or even fail to make a payment.
Setting auto pay can help you ensure that you make your payments on time.
How long does the Installment loan stay on your Credit?
With an installment loan that has been repaid on time, the account remains on the credit file for a period of 6 years. In case you presently have an installment loan, and are making late payments, the same will also remain in your file for a period of 6 years.
How to get out of Installment Loans?
You need to break the cycle of the payday loans by
- a) Prioritizing the loans of high interest
- b) Try for Personal Loans
c)Look into credit counseling of non-profit
d)Ask for extended plans for payments
- e) Ask family and friends for money
- f) Try a consolidation of the payday loan.
Before deciding on any loan it is advisable to take the help of qualified professionals so that you are not caught in the debt-cycle.
