Definition of Installment Loans

Installment Loans – Questions & Answers

Posted on 18th December 2015

Installment loans are the latest innovations in the consumer finance industry. They are revolutionary products that help consumers stay in charge of their personal finances. Most borrowers have questions about newer types of loans such as installment loans and payday loans. We are happy to answer the 10 most frequently asked questions in detail so that you can totally understand what installment loans are.

Installment Loans Q & A

Q #1 What are installment loans?

A: Installment loans are short-term loans that are meant to be repaid over several dates. The function that makes these loans work is multiple repayments. Multiple repayments is when you repay your loan over several dates that can be across weeks or months. Multiple repayments suit many of us as we come out of austerity and look to the future. Multiple repayment calculators help borrowers figure out how long it will take to pay off their loans.

Q #2: Why have installment loans become popular?

A: Installment loans are popular in Britain because single payments have applied pressure to the UK family budget. Single payments can make it hard to keep up payments with other bills. This is why the multiple repayment aspect of these loans have made them popular with people. Loan calculators make it easier to figure out how much you need to repay.

Q #3: How do I remember my installment loan repayment dates?

A: You need to know all of your repayment dates. Forgetting the dates can create financial stress but at the same time, the dates can be fixed. A responsible lender will always communicate to you what your repayment dates are and what they are meant to be. If you fall into financial difficulty, it’s a good idea to communicate with the lender to make sure that the loan can be repaid as soon as possible.

Q #4: How much can I borrow with an installment loan?

A: It’s important to look at how much a responsible lender can look to give to you. This type of  loan depend on your current circumstances, and whether you are in a stable full-time job. Imagine you are in a stable job; it’s easier to get an installment loan instead of different types of loans. Installment loans vary from £500 going upwards. It’s critical to understand how much you can stand to borrow and how much that you can pay back without suffering financial hardship. Some borrowers can choose £500, others opt for £700 but more borrowers choose £500 in total. It’s really important to only choose the amount that you know that you can repay.

Q #5: What can they be used for?

A: Installment loans can be used for a wide range of uses. These loans can be used for holidays, personal uses, and DIY. It’s not a good idea to use them to pay your bills. These are meant to be long-term loans, not short-term loans which means that falling into debt repaying them can cause financial problems. These loans suit you if you need cash for a long-term situation and with the knowledge that you can repay as soon as possible.

Q #6: How many installment loans can I take out?

A: Installment loans should be kept to a minimum. You should not take out more than one loan from one responsible lender.

Q #7: How much is the APR of the loan?

A: It’s really important to read the small print of your installment loan. When you apply to a lender online, the APR will clearly be written so that you understand how much the loan will be. Look for representative examples on the website that explain how much you will need to repay and over how long. APR is the Annual Percentage Rate, which essentially is the interest that you will repay on top of the loan. The APR of these loans is fixed.

Q #8: How long are the loans?

A: Installment loans can range from a different range of time periods. You could choose from 3 months or you could have them as long as years. The consumers who get approved for loans that go on for years are customers that have good credit. If you are improving your finances, you can probably get approved for over a series of months. As a general rule, if you have many financial obligations, you need to take out shorter loans that don’t run on for many months or years. Longer loans will require stronger financial discipline so that you can keep up with the payment.

Q #9: Aren’t installment loans like credit cards or other consumer credit products?

A: The quick answer is no. A credit card is a way for a bank to say that they are giving you money in advance, and they know that you will pay it back based on what you are spending on the credit card. Credit cards are popularly used for emergencies and shopping. Installment loans are not like credit cards because they are meant to be long-term options for consumers.

Q #10: How quickly are installment loans granted?

A: Installment loans totally depend on your financial situation and the responsibility of the lender. Responsible lenders do professional checks to ensure that you are a suitable customer for their installment loans. It’s important to look at the lender’s policies when it comes to granting loans. In general, installment loan criteria depend on residency, income, job status and your general credit rating.

Peachy Installment loan Q and A

With this Q&A, it’s easy to understand why installment loans have become so popular in the UK. Installment loans help you make things happen financially but it’s also important to look at whether your circumstances can allow you to take out installment loans. With smart planning, you can make installment loans work for you.

Enter your name
A valid email address is required
Enter your message


June Ramsey

28th December 2015 at 9:23 pm

When you borrow 200 and want to extend the loan how much would it cost and what would you pay back. Another question is if you pay half of Your loan before the date you suppose to pay it on would you have less intrest to pay, and when could you pay the rest back.

Peachy Team

29th December 2015 at 8:35 am

Hello June Ramsey!
Thank you for your comment!

The amounts depend on how long the loan would be taken out originally and on which date you receive your salary every month. As an example if you would take a loan of £200 for 31 days, then the amount repayable would be £249.60. In case you would choose to extend your loan on the due date, then you should cover the interest of £49.60 and the loan would be postponed until your next income date and the amount would consist of the daily interest and principal once again.
In relation to your second question, you do have an option to make partial payment, but that would not save you any daily interest and rest of the balance would be still outstanding on the due date. Instead you might consider making early payment, that would save the daily interest.
Hope you found our answer helpful!