What is the difference between an installment loan and a personal loan?

Installment loan, personal loan, cash reserve, home loan, … do these words mean nothing to you? Can you no longer see the wood for the trees? Do not you worry! We will talk today about the installment loan and the personal loan, since you have probably heard about these popular loans many times.

What exactly does consumer credit entail?

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Do you dream of traveling the world, do you want to study or do you want to finance your wedding or the baptism of your child? Do you have to be able to cope with unforeseen circumstances? Do you have the necessary money for your project, but would you prefer not to use your savings? Or do you only have a portion of the required amount to finance your dream? An installment loan – or personal loan – is often the ideal solution in these cases.

The benefits of an installment loan?

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The installment loan is a simple and relatively safe form of credit. Simple, since an installment loan can be concluded relatively easily. You do not have to justify the use of the money: the financial institution will only examine your repayment capacity and any other loans. Your application will usually be processed quickly, and – if your application is approved – the money will also be released very quickly. So you can quickly dispose of the money to finance your projects.

Relatively safe, since the term and the monthly repayments are fixed from the outset, which means that you will not be faced with unpleasant surprises. Since the interest rate is also fixed during the entire term of your credit, you can opt for a longer or shorter term when concluding the contract. You therefore determine the duration of your loan and how much you can and want to pay off each month in function of your own budget.

Disadvantages of an installment loan?

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When taking out a loan, always bear in mind that borrowing money also costs money … and in the case of an installment loan, it will cost you a lot of money. The interest rates and administration costs are higher than with other loans, since the bank lends you money without a guarantee.

Make sure you are not mistaken!

Don’t forget to play competition between the banks and to compare the loans from the different providers before taking out a loan. By comparing well, you can save a lot of money!

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