What is an installment loan definition?

The installment loan is a flexible financing solution, which makes it possible to face unforeseen expenses, without being obliged to draw on its personal funds, available on a savings account.

The installment loan is a form of consumer credit through which it is possible to finance a specific project, such as work in a house, the acquisition of a car or a computer.

Obtained without proof of its use, the installment loan seduces more and more consumers in search of liquidity. Slick Cash Loan are experts on these types of loans, as they are providing installment loan services from many years. Today they will guide you, in this article to learn more about this type of loan. Take note!

How does an installment loan work?

An installment loan is a contract by which a bank or authorized body makes available to any natural person a certain amount of money, without this borrower having to justify the destination of the funds received. It is a depreciable credit, which can be obtained both to finance the purchase of a service or a property for an unspecified purpose. This credit is concluded for a fixed period while the repayments are made in fixed installments. As a rule, the beneficiary of such a loan proceeds by monthly repayments.

Although particularities may exist, the various contracts offered by the loan organizations mention certain elements: the amount of the periodic installments, the repayment period, the cost of the credit, the interest rate and many others. The repayment term is based on the amount borrowed.

Prior to making the funds available to the applicant, the lending institution conducts a thorough analysis of its monthly fixed costs as well as its income. And when the organization estimates that the income of the latter is sufficient to enable him to live, he grants him the requested credit.

The different benefits of this type of consumer credit

The lack of justification of the funds is not the only advantage of the installment loan. It is a form of borrowing that offers many benefits. One can cite in particular the fact that the monthly payments, the rate of interest as well as the duration of repayment are fixed. It is therefore a financing solution that protects the borrower from unpleasant surprises, as well as being safe.

Thanks to a depreciation schedule provided on the occasion of the signing of the contract, it is therefore possible to get a clear idea of the terms of this type of commitment. This allows the borrower to optimize the management of his budget. And since repayments must extend over a minimum of 12 months, the beneficiary can therefore support the various monthly payments without compromising his finances.

However, it should be noted that it is impossible for the borrower to request a modification of the terms of the contract once it has been signed. In other words, the repayment period, the monthly payment, the amount borrowed are fixed and do not change during the life of the loan. This means that the funds initially obtained can not be increased.

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