There are multiple benefits to obtaining an installment loan despite the higher interest payments that have to be made compared to personal loans. As compared to a similar substitute, the payday loan, the installment loan has a slightly lower interest rate attached to it and allows for longer repayment terms. Some other benefits include:
Efficiency, efficiency, efficiency: Installment loans are much faster to obtain than other forms of personal loans, which typically involve meeting with a banking institution’s representatives before approval for the loan is received. Comparatively, the online nature of these loans means that approval can be finished within an hour and funds can be received as soon as the next business day.
Acceptance of Poor Credit: These types of loans are available to all types of customers including those with poor credit scores as long as they demonstrate a reasonable ability to repay the principal and interest amounts. On the other hand, conventional personal loans come with strict lending criteria to target higher credit scores.
Flexible Repayment: Unlike payday loans which have to be paid back at the borrower’s next payday, the installment loans are structured more like personal loans in that regard. They allow the borrower to select the loan term and in some cases, even the repayment frequency (monthly, biweekly etc.)