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Essentially, an installment loan involves the repayment of the amount you have borrowed (plus any interest that accumulates over time) in a series of ‘installments’, i.e. regular payments of a set amount on a set schedule.
Installment loans can be both secured loans and unsecured loans. In the case of a mortgage, for example, an installment loan is secured, whereas for a student loan, it will be classed as an unsecured loan.
Fortunately, alternatives to installment loans are available. These options vary in terms of their usefulness and can come with their own risks and rewards as well, so it’s worth considering the pros and cons of each one before moving ahead with any applications.
The alternatives to installment loans we’ll be covering below are:
As the name implies, a payday loan is designed to essentially give you the cash you need for any unexpected expenses or bills until your next payday. When the payday comes, you can pay it all off.
A title loan is a type of secured loan in which you actually give up your own vehicle (other items like jewelry can be used, but vehicles are by far the most common) to a lender as collateral.
Peer to peer (or P2P) lending in Canada involves individuals borrowing and lending money between themselves.
Credit unions are member-owned financial cooperatives that work on a not-for-profit basis and are founded on the concept of people helping one another, and credit union members can get very competitive rates when borrowing money.
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