Installment loans, personal loans, housing loans… do these words seem as incomprehensible as Mandarin or Russian? Most people find themselves in a massive decision, one they can rarely get out of when it comes to finding the right loan. Understanding the differences and similarities between installment and personal MaxLend Loans could help people make their decision easier.
The gist of it all
Installment loans and personal loans mean the same thing, to an extent, as they are very common consumer loans. But people should start at the beginning. Consumer credit is what exactly?
Most people dream of traveling the world, going back to college, getting married, or having a child. Then there are things that most do not like to think about – unexpected deaths, housing emergencies, and so on. To deal with these types of things, people need money.
Some will look to their savings, while others do not want to go near that money. Then there are cases where a person’s savings will only cover a portion of what is needed. In these cases, an installment loan – or a personal loan – is the ideal solution for you.
The advantages of installment loans
The installment loan is a simple and relatively safe credit because borrowers do not need to justify their use of the money. The financial institution will simply analyze their ability to repay the loan, including running a check on their financial history. Examination of this file will generally be done very quickly and the money will be made available shortly thereafter.
This option is relatively safe because this type of credit has a fixed term with monthly payments, which makes it a financing solution without surprises. Since the interest rate remains fixed throughout the life of the loan, people only have to extend or shorten the duration of the loan to vary their monthly payment. It is the borrower’s budget that will determine the duration and repayments of their loan.
The disadvantages of these types of loans
Keep in mind that borrowing money costs money and in the case of an installment loan, it will cost the borrower a lot. Interest rates and filing fees are higher than those of other loans since the bank lends you money without any real collateral.