Guide to Instalment Loans
As the name suggests instalment loans are loans you pay back over a period of time. They are an alternative to payday loans and can be set for up to 12 months.
Rather than pay the loan back in one lump sum you pay the debt back over a period of time, in smaller instalments. Timescales are usually from 6 to 12 months but many lenders offer a range of different options.
Features of Instalment Loans
- The loan is paid back in instalments ranging from anything from 3,6 or 12 months
- Many lenders allow you to make equal instalments each month
- The application processes are usually online with decisions made very quickly and easily
- The loan is often with you very quickly, once agreed it could be in your account within minutes
- You can often borrow up to £2000
Difference between payday loans and instalment loans
Payday loans are only available up to £1000, an instalment loan will allow you to borrow up to £2,000.
Payday loans require you to repay the debt on your next payday. Instalment loans allow you to repay the debt over a period of time.
The main benefit of instalment loans over payday loans is you have longer to pay back. Payday loans that are not paid back roll over incurring extra fees and interest. This is avoided in instalment loans.
Instalment loans can however charge higher rates of interest so it pays to shop around and consider what you can afford. It is always best to look at repaying the debt early, but do check if your lender will charge you a fee for early repayment.