When in need of money, the right solution can be hard to find. While there are plenty of possibilities out there, you should always educate yourself about all of the options presented to you before making a choice. Instalment loans are usually one of the best solutions when money is needed quickly, and here are some reasons why.
What are instalments loans?
Instalments loans usually function the same way as regular loans or payday loans in terms of application and receiving the money. What differentiates them from the other types of loans is the pay back. Instalments loans companies will give you a longer period of times for you to pay back as well as split the payments in a number of instalments that will usually be automatically taken off your account on selected dates, sometimes pay dates. For example, if you take out a $1,000 loan with 25% interest and 24 months to pay back, you will make 24 regular monthly payments of $53.37. However, if you ever wish to resume your payments earlier, practically all the companies allow you to schedule bigger payments.
Better than Payday loans?
Payday loans have a shorter duration, meaning that you have to pay back the full amount you are due faster. Also, these types of loans are usually meant to be paid back in one single payment on the client’s next pay deposit. Since pay day loans are over a short period of time, they will usually have a higher interest rate. On the other side, instalment loans allow you to pay back over a longer period of time and in more than one payment.
As there are many Canadian companies out there offering instalments loans, you can choose the amount you want to borrow depending on how much you need.
Better than credit cards?
Instead of making pricy buys with your credit card, when you know you won’t be able to reimburse them instantly, using instalment loans will make you save a lot of money in interest. Indeed, unlike credit cards, if you successfully pay your set instalments, there will be no added fees.
Helpful to Build Up Your Credit
For people with either bad or nonexistent credit, instalment loans are great to build up good credit. Since they require multiple payments spread out over the term of the loan, they help create history of repayment. This repayment history is sometimes reported to credit agencies and will then help to improve that credit score. Also, if you are trying to get a loan, a mortgage or anything else afterward, it is going to be easier for you as they will be able to see that you are able to respect fixed payments.