Installment loans might be a good way to get through tough times. We are living in such times right now, as the economy has cracked under the strain. People are just scraping by if they aren’t losing their employment. When an emergency arises, they unfortunately have nothing left.
It’s difficult to pay bills when you don’t have any money left over after spending it on life-saving medication. It’s difficult to get to work on time when your automobile breaks down. Worse yet, you can never tell when these occurrences will occur. This is precisely the period when anyone would require additional funds. You can also apply for a ‘small loan’ (also known as ‘minikredit’ in German language).
You can fortunately receive an instalment loan to help you get through these difficult times. An instalment loan functions similarly to a payday loan. You can borrow money and repay it before your next payday.
The distinction is that, while payday loans require you to pay the total amount due right once, instalment loans allow you to pay smaller sums over time. This is an essential aspect that can actually make instalment loans more viable than payday loans.
For better or for worse
Payday loans are frequently chastised because of studies and predictions that they exacerbate long-term debt. People have been known to take out additional loans in order to keep a payday loan afloat.
Because you just have to pay the same amount over a longer period of time, instalment loans are a healthier option. There is a specified time frame in which you must repay the loaned funds. The allowance offers the loan a leg up on the competition in the lending market. The strain of repaying is greatly alleviated.
The same can be said with instalment loans. Lenders will sometimes only give loans to persons who can provide collateral or have a good credit rating. This is a devastating blow to those who really need the money but are in the midst of repaying it. Installment loans, on the other hand, are ideal for this process because you can still pay them back because the amount owing is smaller. This frees up space for payments on earlier debts.