It doesn’t matter how much careful you are with spending your money and managing your expenses; everything doesn’t always go as you plan. Where you might think that your life is going smoothly and you have an adequate inflow of cash to manage your monthly expenditure, life has a funny way of reminding that you are not in control. Whether you like it or not, nothing can be planned with surety. Just when you think everything is perfect, your car may suddenly give up on you, or you might suffer from a disease, or your house might need some immediate repairs. Emergencies can come in any form, and in these hard times, most of us are looking for ways to get our hands on as much money as we can. We might turn to our friends for help or might consider the option of getting loans from a bank. But what happens when you have bad credit? How do you get loans in this situation? This is where installment loans come in.
What Are Installment Loans?
Before introducing you to the details of installment loans canada, let discuss what they actually are. Typical applied online; it is a form of loan in which the borrower is given a sum of money which he must pay back in installments over a decided period of time. The decided period will cover the initial amount of money that was taken as a loan and the interest that was decided. For example, if you borrow $2000 at a 15% interest rate over a period of 24 months, you would have to pay nearly $97 each month with a total interest of $327, and the total amount stacking up to $2327. So unlike other loan plans, installment loans have an end date by which you have to repay all the amount.
Most Common Types of Installment Loans
Depending on what type of loans you are going for, installment loans differ in the interest rate and determining the collateral for your loans as they are often secured loans. So, here are the 4 most common loans you might consider going for.
The most common thing an average citizen takes installment loans Canada is for his mortgage. In case of an installment loan for a mortgage, your property is used as collateral. Collateral is something that the lender chooses, which would become his possession in case you don’t comply with monthly payments and pay off your loan in the decided time. Mortgage loans range differently from 15 years to up to 30 years, depending on the package that best suits your needs. Stretching your loan over a longer period of time may make it easier for you to pay it, but it will also make the overall loan more expensive.
· Personal Loan
A personal loan is taken out to pay for an expense. Commonly it is a type of loan that is taken out to consolidate debt. As installment loans have an end date, and they can be repaid over a period of time. People who can’t pay off their debt take out a huge chunk of money as installment loans to pay debts at once and make monthly payments to cover their instalment loan. This is a type of unsecured loan, so you don’t have to put anything as collateral.
· Auto Loan
As the name suggests, an auto loan uses your vehicle as a security against the installment loan. You can get easy money to manage any expenses you might have to pay for fixing your vehicle. Like all other installment loans, after you have decided the amount of money that you want, the interest rate, and the duration of the period that you require to pay off the loan, you get the loan as soon as possible.
· Student Loan
If you are a student who is trying to cover his tuition fee and other expenses in college or university, you can apply for a student loan. Having the option of paying back a loan in installments is very helpful for students who don’t earn much money. Moreover, the payments start only when you are out of school, and your education ends. The interest rate of student loans depend on your credit info and is thus varied from student to student.
Benefits of Installment Loans
As discussed above, installment loans give the borrower the relaxation of paying their loans over a period of time instead of at once. This lets them manage their payments in a more efficient way, and in the end, both the lender and the borrower stay happy. Let’s discuss some more benefits of installment loans.
· Terms of Payment
Like all other types of loans, you have to pay installment loans eventually. But, what other loans don’t offer you is the flexibility to customize your payment options. If you think that you can make a worthy investment, you can apply for an installment loan and get it quickly. Even if your venture turns out to be a failure, you won’t feel the pressure of repaying your loan in one payment as it is divided over several payments.
· Reliable Interest Rate
Another advantage of going with installment loans is that the interest rate can be trusted. The percentage of interest stays the same throughout the loan term, and you don’t have to worry about the interest rate increasing with time as with most loans.