What are the Pros and Cons of an Installment Loan?

Installment Loan

An installment loan could be your ticket to managing a large purchase in smaller and more bearable increments. This is one of three ways we help clients handle financial emergencies (along with personal loans and credit lines). We’d like to go over the pros and cons of this process to help inform your decisions on how to pursue these effective financing vehicles.

What is an Installment Loan?

Installment loans give the purchaser the credit to cover a large expense over a longer period. Let’s say that you need $6,000 to pay off an automotive repair, but can’t handle it all at once. This type of loan lets you break it into installment payments over the course of 12 months (i.e., $500 plus interest).

You can get them at a fixed interest rate and APR, so it removes lots of confusion, giving you crystal clear expectations. Variable rates get a lot of people into trouble, so it’s best to avoid them in most cases.

We offer them in three different states: Missouri, Texas, and Wisconsin. If you’re tired of getting into financial trouble with revolving credit lines (i.e., credit cards), then this might be a much better approach for you.

Installment Loan: Pros & Cons

Now, that you know the basics, what are the pros and cons of using installment loans?

Pros

  • They’re convenient, and it’s easy to apply for them.
  • They take a lot of the pressure off making big purchases for expensive things like home improvements or new vehicles.
  • These loans have higher limits than other credit options.
  • You can qualify for these even with low/no credit scores.
  • Monthly payments are consistent, predictable, and correspond to your budget.
  • You still have the option to pay it off earlier.
  • It’s not much different from taking out a mortgage, which also has set installment payments for as long as 30 years.

Cons

  • It requires you to make the same monthly repayment each time, which could present difficulty if you lose your income or experience other problems.
  • You have to contend with higher interest rates for a while.
  • You may want to try a different loan if you’re looking for continuous cash flow (see the next section on personal lines of credit).

Other Effective Financial Options

Installment systems aren’t for everybody, which is why we also offer a couple of other methods: personal loans and personal lines of credit.

Personal loans might be more advantageous if you know you only need a lump sum of money now but will be able to pay it off quickly later. This is how many Americans pay for college.

Do you require funding for an ongoing project like a restaurant business you’re opening? Then you might consider obtaining a personal line of credit. Keep in mind, though, that this requires a higher credit score, but it offers you consistent cash flow for a specified timeframe.

At any rate, everything we’ve shown you is a far better alternative to payday loans, which put you in a risky position with difficult payment expectations.

Cash Link USA: A Better Loan Is Here

You never have to second-guess your decision when you apply for a loan with Cash Link USA. Whether you prefer the structure and manageability of an installment loan or prefer something like a personal loan, we can assist.

Don’t take our word for it, either. We welcome you to look over the more than 3,000 reviews we have on Trustpilot, which yield us an Excellent rating. It shows how much we help ordinary Americans get out of financial trouble with reasonable financial solutions.

If you’re ready to obtain an installment loan with Cash Link USA, contact us soon to find out how to begin the process.

Frequently Asked Questions

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