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Bonsai Finance: Increasing Awareness and Understanding Installment Loans for Poor Credit

An installment loan refers to a loan wherein a set of number of scheduled payments are made over time. For instance, Jane needs to borrow $1,000 to pay for an emergency medical expense. Jane took advantage of an installment loan that needs to be paid within 24 months with an interest rate of 25%. Jane will need to pay $53.37 for a period of 24 months in an installment loan. What makes an installment loan different from a payday loan? Generally, payday loans are short-term, with higher interest rate, and are usually paid back as a single lump sum payment on the borrower’s next pay period. On the other hand, an installment loan lasts for many months and payments are spread evenly over the term of the loan.

Installment loans are usually used to help to build credit for those who have a poor credit, bad credit, or no credit history. Since installment loans involve multiple payments, they help in creating a history of repayment. Installment loans can help Jane establish a good credit history for better business transactions. If you are needing extra funds that go beyond what cash advance can offer, one good solution is an installment loan. Borrowers are given more flexibility to decide how much they can borrow and the duration of time they can pay it back. A borrower can decide on a shorter loan term and make larger payments or vice versa. Not all states have installment loans, and there are some states that dictate the minimum and maximum loan amounts that a borrower can borrow from an installment loan.

In an installment loan, there are associated fees and interest charges, and these fees and charges must be written and explained in the lender’s loan agreement, and notifications must be sent to the borrower if late fees apply if ever the borrower is unable to make payments on time. You need to make sure that if you are planning to get an installment loan, the lender should clearly express all fees and charges in a dollar amount as well as an APR or annual percentage rate as required by the U.S. law. Allow Bonsai Finance to help you get an installment loan so you can create a good payment history, most especially if you are dealing with a bad credit or poor credit standing. Allow us to be your ultimate partner when it comes to installment loans, to help you create a good credit history, and establish a good credit standing over time.

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