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Budget loans for bad credit 101: What are installment loans?

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Do you have bad credit? Are you looking for a loan that will suit your financial situation?

If you have bad credit, then you may want to consider an installment loan. What is an installment loan? And, why is it good for those with bad credit?

Check out this budget loan for bad credit guide to learn everything you need to know about installment loans. 

What is an installment loan? 

An installment loan is a kind of loan in which you borrow a certain amount of money all at once. You then repay the loan through a fixed amount of payments, also known as installments. 

A lot of installment loans have fixed payment amounts. This means that the amount you payback doesn’t change over the lifespan of the loan. In other words, if the loan costs you $50 per month, then it’s always going to cost you $50 per month until it’s paid off. 

Types of installment loans

Even if you haven’t heard of the term installment loan, you’re probably familiar with some of the types of installment loans out there. Some of the most common types of installment loans include:

Mortgages

A mortgage loan is a type of installment loan in which you borrow money to buy a house. Mortgages are typically paid over a 15- to 30-year time period with monthly payments. 

A lot of mortgages come with fixed interest rates, which means that you’ll be paying the same amount every month.

Auto loans

Another common type of installment loan is an auto loan. People typically repay auto loans in monthly installments over the course of 12 to 96 months.

Personal loans 

Personal loans are another common type of installment loan. Personal loans can be used for a variety of reasons, such as paying off medical bills or consolidating debt. Like car loans, personal loans typically come with terms between 12 and 96 months. 

They also typically come with higher interest rates than other types of loans. This is typically because personal loans don’t require you to put down any sort of collateral, such as a car or home. 

Getting an installment loan with Bad credit 

So, if you have bad credit, can you get an installment loan?

The answer is yes. As we mentioned earlier, many people use personal installment loans so they can consolidate their debt. If you’re looking to boost your credit, you need to get rid of your debt. For many people, debt consolidation is the first step in debt elimination. 

If you want to learn more about using installment loans to tackle your bad credit, you can check out Bonsai Finance

Budget loans for bad credit: Are you ready to take out an installment loan?

Now that you’ve read this guide on budget loans for bad credit, it’s time to decide if an installment loan is right for you. Installment loans can be a great way to start tackling your debt and get control of your finances, so it’s definitely worth considering. 

For more financial tips and tricks, be sure to check back in with our blog.  

See other top articles from mtltimes.ca and totimes.ca

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