Instalment Loans – How is this Type of Loan Different than Others?
As the name implies, instalment loans are those which are settled over time in a number of incremental payments (or instalments). For example, a homeowner may wish to take a mortgage out on a piece of property. After the loan is approved, the money is deposited into the individual’s bank account and they are given a set amount of time to repay the balance (plus interest) back to the lender. Of course, repayment times can vary widely: On a mortgage, these can last as long as thirty years, while short-term financing solutions, such as payday loans, can be settled in a matter of weeks or months.
What are the main benefits of instalment loans?
One of the major benefits of instalment loans is the fact that they offer flexible repayment periods. Rather than being forced to pay the lump sum at once, borrowers who opt for an instalment loan agree to a repayment plan that is stretched out over a period of time. Thus, a monthly budget can be put together, and the borrower will know exactly how much they need to allocate in order to satisfy the requirements of the repayment period. This is one of the greatest advantages of these types of loans; however, it is also important to recognise that not all lenders will offer the same degree of scalability and flexibility. At Peachy Loans, we offer our customers an extremely wide array of short-term repayment options; our borrowers can choose to settle their account in up to five different instalments. This is critical in maintaining much-needed liquidity during the entire process.
How do I know how much I will be required to pay back?
This is perhaps one of the most important questions that need to be asked. In fact, regardless of the type of loan, you should always check both the interest and the principal. For long-term loans, i.e. those that are to be repaid over years or even decades, the interest is much lower and may be either fixed or variable. Loans of a shorter duration, on the other hand, while almost always fixed, also tend to be associated with higher interest rates. This is critical to know when calculating your payments.
For example, short-term loans can be as high as two or three thousand per cent; in that case, it’s possible for the interest payment alone to be so high as to defeat the whole purpose of the loan (you may well end up paying nearly double the amount you initially borrowed). It’s obvious then that a great deal of information is needed before you consider this financial instrument. We at Peachy Loans have a great deal of experience in these matters and very much appreciate that this can be a confusing process. In order to provide the highest level of transparency possible, we provide a loan calculation chart that tells customers exactly how much interest will be included in the final total. It is strongly advised to avoid companies that do not provide such clarity.
I have heard of a loan calculator. What exactly is this device?
A loan calculator is simple way of viewing a breakdown of your payment plans, the interest attached to each payment and the total amount owed before you actually apply for the loan. For example, let us imagine that a loan for five hundred pounds is required and you wish to pay it back over a five-month period. The calculator will give you a summary of the total value of the loan provided by the agency (including the interest rate), broken down into individual payments. With this information, you can decide whether or not it makes sense for you to request the loan. Of course, since we take the financial well-being of our customers seriously, you can find Peachy’s loan calculator right on the front page of our website. This is because we want to ensure that all loan obligations are made perfectly clear before you begin the application process. With Peachy, you will always know exactly when each payment is due and can therefore adjust your budget appropriately.
Can I pay back my loan quicker than the instalment period I have chosen?
This is one of the most common questions we receive and the answer is yes. In fact, paying back instalment loans ahead of time is an excellent way to avoid paying too much in interest. At any time during the instalment process, you can pay back the entire loan, plus whatever interest is due, in one lump sum payment. This will also put you in a good position to apply for another loan in the future, possibly for one of a higher value than the initial loan was worth.
Are there any “hidden fees” or fine print with these loans?
Unfortunately, there are instances when this can occur, another reason why it is important to choose lenders that offer all the information you need up front and without obfuscation. At Peachy Loans, we believe that the entire process should be as transparent and straight-forward as possible. Our terms and conditions are clear, our processes are easy to understand and there are absolutely no hidden fees attached to any of our services. Simply stated, what you see is exactly what you get.
What are the downsides to instalment loans?
As with any loan, the biggest risk is in failing to make the payments as scheduled. This can result in higher interest rates or other penalties. The best way to avoid this is to have a very definite budget in mind before finding a lender and to be sure to choose a transparent and flexible lending service through providers such as ourselves.
At Peachy Loans, we are proud to be a flexible lender offering our customers numerous solutions to their short-term financial problems. We know these types of loans can be excellent financial “springboards”, helping to provide much-needed liquidity in challenging times.