A loan taken attracts an interest fee, and interest rates are highly dependent on the type of loan received. Most often than not, the lender determines the type of loan you get to take; sometimes you get the luxury of deciding. Whether for personal use or business purposes, knowing what kind of loans are available is very important in making financial decisions.
Just like the name implies, an installment loan is one in which the borrower pays back the loan taken in installments over a period. Credit cards are a good example of open-end installment loans with the option to pay off with monthly payments. The merits of an installment loan include flexibility and customization of repayment plan to the borrower and accessibility to affordable loan service.
The main advantage of installment loans is that it is a great way of providing cash advance for people. You can spread your payments over a long period of time from the moment you get the loan and pay small amounts of the money borrowed over this period. The way an installment loan works is fairly simple.
Single Payment Loans
Single payment is different than installment loans by you don’t make any partial payments but you just wait for the due date and pay the debt in full. Single payment loans can be a good way to reduce your bills and consolidate your debt; however, you must be careful that you don’t end up just adding to your debt.
Single payment loans are good for people with short-term funding needs and who are able to pay when the maturity day arrives. These loans are available to the borrower in terms which the due date is further enough – with some flexibility – to provide the repayment amount. Therefore they can help a lot with immediate and unexpected fast cash needs like medical emergency situations, car problems or towing payments.