What Are the Types of Installment Loans?

Loans have become a basic part of our society today because everybody needs them to meet some needs that they cannot entirely pay for immediately. The most common type of loans around are installment loans, and they are popular because the process of payment is really convenient for most people.

With an installment loan for bad credit on WeLoans, the borrower will receive a loan of a lump sum from the lender, but instead of repaying the lump sum at once, the borrower will be allowed to repay the loan in installments. The payment will come at specific intervals, and each payment will be for a portion of the loan along with some interest.

Installment credit packages are so common that almost every American would have gotten an installment loan to handle financial matters at some point. For more information about installment loans, a financial writer, Nabila Yusuf from WeLoans has her own insights, you can go read her posts on WeLoans’ pages. The following are all the popular types of installment loans that are commonly available.

Personal Loans

Personal loans cover almost all expenses that people need. They are the most common loans that you will find, and they are structured in such a way that you can pay weekly, monthly or quarterly.

You can get personal credit packages from banks, online lenders, credit unions, and other financial institutions. If you are getting a personal loan from a bank, or any traditional financial institution, your credit score will be considered before the loan request will be granted. 

The typical credit score requirement for these loans is between 560 and 700. However, if your credit score is too low to get one of these popular personal loans, there are still options to explore. For instance, you can get online personal installment loans for bad credit on WeLoans with little stress involved.The exact amount that you will be able to get through a personal loan usually depends on the lender’s assessment of your financial situation. 

Mortgages

With a mortgage loan, a person can get a house even when they do not have all the money to pay for the house immediately. These packages are also called home loans because they allow people to live in houses while they pay for the cost of the house over an extended period of time.

Here, the person living in the house will only be a part owner of the house while the mortgage is being paid. If the person fails to make a payment, there may be arrangements for the mortgage to still continue. However, eventually, the house could be lost to the lender through foreclosure, where the borrower fails to meet the terms of the mortgage agreement. 

Mortgages typically last for about ten to thirty years, and with each installment payment, the borrower will be adding some specific percentage as interest. However, mortgage agreements also allow the borrower to pay out the mortgage early if they can.

Auto Loans

Auto loans work just like mortgages, except that instead of being a loan to purchase a house, these loans are for purchasing cars. Here, the financier will help the borrower to purchase a car, and the loan will be repaid in installments over many months. The APR could be around 2% to 6%, depending on the lender you are working with and other factors that the lender will consider, like your credit score.

Just as it is with mortgages, where the borrower fails to meet the terms of the agreement, the lender could repossess the car to get their money’s worth back. This is why it is important to budget and plan appropriately before purchasing one of these plans. 

Asides from cars, auto loans can be used to finance many other properties like motorcycles, speedboats, and a lot more. They can be gotten from banks and online lenders, and many times, car dealerships could offer auto loan financing options to purchasers.

Buy Now, Pay Later Loans

Buy now, pay later loans allow people to purchase goods without paying the entire cost of the time immediately. Here, the person will pay a portion of the price of the product, and the rest of the payment will be spread across multiple installment payments.

Many retailers include this option in the payment services they have available for buyers, and they typically do not add interest or fees to the payments. They do not require as much paperwork as personal loans do, and they also don’t boost credit card debt. 

Credit Builder Loans

These loans are a great way to boost your credit information with the credit bureaus. Here, you make regular payments to the dealer as if you were repaying a loan. The dealer will take some interest in each transaction and return the rest of the money to a savings account on your behalf. After an agreed period, you will be granted access to your money.

Title Loans

These are collateral loans that can be repaid in installments. Here, some property like a car or a house will be used as collateral for the loan while the lender will give you a specific amount of money. Once the installment repayment period is complete, the loan will be discharged, and you will fully own your property once again.

However, where you fail to make payments to fulfill the terms of the agreement, the lender could take ownership of the property and use it to recover the money they lend you. 

These loans are easy to purchase once you have the property to use as collateral, along with sufficient proof of ownership of the property. 

Conclusion

Installment loans are a pretty common option among many borrowers in America today. This is mostly because it offers a good level of convenience during repayment and allows most people to pay off a certain amount at decided intervals. Even better, installment loans come in different forms as mentioned above. 

In essence, you can take out just the specific type of installment loan that caters to your need or repayment plan. For instance, if you’re looking to enjoy funding with your car as collateral, title installment loans are a perfect option, while unsecured borrowers can opt for personal loans. 

Either way, it is important to only take out a loan that you have the ability to repay over a specific time frame. To get started, you can visit WeLoans and apply to get installment loan offers from reputable lenders.