Bonsai Finance: Increasing Awareness and Understanding Installment Loans for Poor Credit
An installment loan is defined as a loan wherein a set number of scheduled payments is made in a specific given period of time. For instance, Jane wants to borrow money worth $1,000 for an emergency medical expense. Jane can take out an installment loan requiring her to pay the amount back in twenty-four months at a 25% interest rate. In an installment loan, Jane can get a check worth $1,000 and pay regular monthly payment of $53.37 for a period of 24 months. What is the difference between a payday loan and an installment loan? Payday loans have higher interest rates, paid as a single lump sum on the next payday of the borrower, and are consider short-term loans. On the other hand, an installment loan lasts for many months and payments are spread evenly over the term of the loan.
Installment loans are usually used to help to build credit for those who have a poor credit, bad credit, or no credit history. The reason for this is that installment loans are requiring multiple payments over time, helping create a good history of repayment. If you are making timely payments, you can build a good credit history because a borrower’s payment history is reported to credit reporting agencies. Having a bad credit can really ruin your finance reputation most especially if you make business transactions, so dealing with an installment loan can help build and establish a good reputation. If you are needing extra funds that go beyond what cash advance can offer, one good solution is an installment loan. Borrowers are given more flexibility to decide how much they can borrow and the duration of time they can pay it back. A borrower can decide on smaller payments for a longer payback period or a shorter loan term with larger payments. Not all states have installment loans, and there are some states that dictate the minimum and maximum loan amounts that a borrower can borrow from an installment loan.
In an installment loan, there are associated fees and interest charges, and these fees and charges must be written and explained in the lender’s loan agreement, and notifications must be sent to the borrower if late fees apply if ever the borrower is unable to make payments on time. It is important to be aware the lenders must express all charges and fees in dollar amount including the annual percentage rate (APR). Allow Bonsai Finance to help you get an installment loan so you can create a good payment history, most especially if you are dealing with a bad credit or poor credit standing. Instalment loans can be your best option in times you need to establish a good payment history, and we can be your partner!
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