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Understanding Installment Loans before you Take Out One

  • by Jarrell Marley
  • 10 Months ago
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The lending world offers all kinds of loans including car loans, mortgages, payday loans, student loans and credit cards. These loans can a revolving line of credit or installment loans. Installment loans allow you to borrow a certain amount of money from your chosen lender and pay the loan back with an interest every month.

If you qualify for an installment loan, you may use the money for buying an asset like a house or car or paying a part of your college tuition. This all depends on your financial situation and credit rating. When compared with payday loans, installment loans are paid based on the pre-determined amount and period instead of paying the entire sum on your next payday. Learn more about it at Slickcashloan.

Installment Loan Explained

As already cited, installment loans let you agree to pay a fixed payment every month over the length of your loan’s term. With a revolving line of credit such as a credit card, you will have to pay what you owe within a set limit. In order to determine if you qualify for this type of loan, your chosen lender will check your credit score, debt-to-income ratio and income every year. They will see how much you can afford to borrow and pay back. It is likely that the lender will ask you some questions that include your current employer’s name and how many years you have worked for them. This helps them determine how well you may be able to pay the monthly payments on your loan.

Getting an Installment Loan

When looking to borrow an installment loan, keep close tabs on your credit score since this plays an important role in your creditworthiness and the approval of your loan. Also, ensure you have accurate and clean credit reports before you apply for this loan. Try to request a free credit report from the major credit reporting agencies and correct any errors.

Moreover, lenders may look at your debt-to-income ratio so ensure your outstanding credit balances are paid off before you get a new financing. This can help you in securing a new deal and keeping you from getting rejected by a lender.

Where to Get the Loan

When it comes to installment loans, a great place to start shopping is with a bank or credit union where you may have built a good relationship with a possible lender. But you can also find a lot of lenders online that provide personal installment loans. Make sure though that you choose a legitimate company like slickcashloan.com.

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