Around 65.3% of Canadians have taken out a personal loan to help with their financial troubles. If you are in need of financial assistance and are thinking about taking out a loan yourself, then you may want to consider an installment loan.
Installment loans are one of the most commonly used loan types in Canada. Read on to learn more about how this type of loan could help you.
What Is an Installment Loan?
Installment loans are loans that allow you to borrow money and then pay them back in fixed payments on a monthly basis. This is a great way to get fast money that you can pay back in a manageable way.
Typically, installment loans come with a fixed interest rate so you don’t have to worry about payments going up each month.
Types of Installment Loans
There are many different types of installment loans. Here are a few of the most popular forms.
Auto Loans
An auto loan can help you get a new or used car. This is a great option for people who are not able to pay the full vehicle cost upfront. Auto loans allow buyers to make a down payment on the car and then finance the rest of the purchase with a monthly loan payment.
Auto loans generally take two to ten years to pay off, depending on the type of car you purchase and how much money you borrow.
Mortgages
One of the most common installment loan types is a mortgage. This is a long repayment commitment, but allows homebuyers to get their dream home without breaking the bank. It commonly takes about 15 to 30 years to pay off a mortgage loan.
Personal Loans
Personal loans cover a wide range of expenses. These loans can help you pay off debt, make unexpected home or car repairs, or cover emergency medical expenses. The repayment period for personal loans typically ranges from 24 to 60 months.
Student Loans
If you are having trouble paying for schooling, then you may want to apply for a student loan. Student loans can help you to pay for post-secondary education. Oftentimes, you don’t have to pay a student loan off for many months after you finish school.
No-Credit-Check Loans
If you have a poor credit score, then a no-credit-check loan could be a good option for you. This allows you to get money quickly without having to complete a credit check. These loans are often used in emergency situations.
These loans are typically small, ranging from around $200-1000. When applying for a no-credit-check loan, your paycheck is used as security against the amount of money you are given. The lender will take the money out of your bank account on your next payday.
Buy Now, Pay Later Loans
Buy now, pay later, also known as point-of-sale financing, is typically offered by retailers. These loans allow you to spread out your payments for a product over many different installments. Depending on what you buy, these payments can last anywhere from a few weeks to a few years.
Should I Get an Installment Loan?
Are you wondering whether or not you should apply for an installment loan? There are many things you should take into consideration before borrowing money.
If you need help navigating the loan application process, then feel free to check out our recent blog post on the subject. In the meantime, take a look at these pros and cons of taking out an installment loan.
The Pros
There are many different benefits of taking out an installment loan. One of the biggest advantages is that it comes with a consistent monthly payment. You never have to guess about next month’s payment because it will always be the same.
Fixed monthly payments make it easier to make a budget for the month ahead. You don’t have to worry about anything unexpected when it comes to an installment loan.
Installment loans make it easy to pay for things that you may otherwise not be able to. it is a great way to get fast cash for big purchases such as cars or houses.
Another benefit is that you are able to refinance your loans. If interest rates go down or your credit score grows, then you may have the opportunity to refinance into a new loan. This can make your monthly payments smaller or make the length of the loan shorter.
Lastly, making your payments on time can help to improve your credit score. A good credit score can boost your chances of getting loans in the future.
The Cons
Just like any other loan, there are a few drawbacks to taking out an installment loan. If you find out you need more money than you originally got, you are not able to add more onto it. Because the payment is fixed, you get what you get.
It is also important to make sure you are able to make the payments on time each month. Some installment loans come with a long repayment period that requires a lot of budgeting and planning on your end. On the other hand, some lenders will charge you if you pay off the loan earlier than expected.
Another drawback is that it may be a hefty expense if you have poor credit. The interest rate is based on your credit score, so people with poor credit will likely be denied a loan or hit with a high-interest rate.
Contact Us for Information Regarding Installment Loans
Installment loans can be incredibly beneficial in many different situations. If you are thinking about applying for an installment loan, then we have the resources for you. Tekaloan can get you a loan quickly in just a few simple steps.
Feel free to contact us today to learn more about the different types of installment loans we offer.