Fate is not always under our control. Sometimes, there can be a situation when you are in urgent need of money, and you do not have it in hand. For a situation like this, Instalment loans could be your go-to friend. It will help you by spreading out the amount borrowed and paid in equal instalments.

Short-term Instalment Loans: The borrower borrows a relatively smaller amount of money for a short period, from a few weeks to a few months.

Long term Instalment Loans: In this, the borrower borrows a bigger amount that they may not repay in a shorter time. The repayment time is long and ranges from 12 to 48 months.

Best Instalment loans to avail? 

They are many types of loans available under instalment loans depending upon the purpose for which it is available.

• Home Mortgage Loan: 

It is a secured loan in which the borrower provides his house only as security and borrows the amount. The amount is a certain percentage of the property’s value, which you could use for the house repair works or repair the premises. As the borrower has provided collateral, the lender will offer the loan amount for a lower interest rate. Generally, these loans are availed for a higher tenure. In case of failure of repayment, the borrower has the right to seize and auction off the house.

• Business loans:

These loans could be secured loans or unsecured loans. The corporates usually borrow it to meet their short-term and long-term requirements. Based on the company’s requirement and the company’s financial health, the lender would charge the interest rate accordingly. The company may or may not require giving security. If they provide security for their land or machinery, the interest rate charged could be lower, and the repayment period would also be based on the same.

Can I take Instalment Loans online for bad credit?

Generally, lenders prefer to provide loans to people with good credit score since it lowers the risk of default. However, nowadays, lenders have started issuing loans to the bad credit score customers as well. The lenders analyse the applicant’s current financial situation, standings and relevant documents. Then they approve the application and offers the loan if the level of risk matches their appetite. When a person with bad credit applies for a loan, there is a high chance that the interest rate would be higher than the usual rates at which the loans are lent.

Things to keep in mind before availing of an Instalment Loan: 

• Before applying for and availing of a loan, carefully evaluate all the options present in front of you and then make an informed decision. Some important checkpoints for evaluation are; the interest rates, principal amount limit, tenure for repayment, need for security and terms & condition of the loan.
• Use EMI calculators to have a rough idea about the instalments and check your affordability with respect to your monthly budget.
• In the case of floating interest rates, have some room for flexibility in your monthly budget for the repayment.
• Try to improve your credit score before availing of a loan to maximise the benefit from lower interest rates.

Having a planned out financial roadmap is the key to a happy future. In case of emergencies, instalment loans can be used at our disposal. However, such decisions should be made after thorough planning and evaluation since a wrong decision can affect us financially in the long run as well.