According to recent statistics, average consumer debt in Canada grew by about 4.5% over the last year. Some debt might be from credit cards, while others might come from online installment loans.
If you ever encounter a time when you need some cash, you can turn to installment loans. If you have never had one before, you might have some questions about them.
You may have heard about these loans, but you might have questions about them. For example, you might wonder what they are, why you would need them, and the benefits they offer. If you have questions like this, read this guide to find the answers.
The Basic Principles of Online Installment Loans
First, anytime you get a loan online, it is considered an online loan. Online loans are those that you apply for through a website instead of visiting a lender in person or calling them on the phone.
Getting loans online offers many benefits, but the main one is the simplicity of the process. Having the ability to apply for the loan through a website is simple, fast, and convenient.
The second part of an online installment loan is the term “installment.” Any loan that includes this word means that you repay it through a series of payments. Generally, the payments are for equal amounts and due monthly.
Installment loans are different than payday loans online in some ways, but they are the same in other ways. Installment loans are a form of fast cash loans, as you can get them quickly.
Here is a breakdown of how installment loans work:
- You apply for a loan online
- The lender reviews your application
- The lender sends you the money if they approve your application
- You receive the money and spend it however you wish
- You repay the loan by making the necessary number of monthly payments
It’s that simple. Now that you understand this part of it, you’ll benefit by learning a few more things.
Before you take one, though, make sure you can afford the payments. Your lender might spread the payments over a period of six months or longer. You can request a longer duration to make the payments more affordable.
Reasons People Borrow Money Through Them
The next thing you’ll want to learn is the reasons people use cash advance loans like this when they need some extra money. The first thing to realize is that you can use the proceeds for any purpose. Lenders do not restrict these loans to specific things.
While you can use them for any purpose, it’s always crucial to have a necessary reason for taking an online installment loan. In other words, you shouldn’t take one so that you have money to spend frivolously.
Here are some common reasons people borrow money through online installment loans:
To Pay for Unexpected Expenses
Life is full of surprises, and many of these surprises cost money. For example, your car might break down, leaving you with a large repair bill. Your washing machine might stop working, causing you to need a new one.
When things like this occur, you might have expenses to pay that you did not expect. An online loan can help you cover the costs of these types of unexpected expenses.
To Consolidate High-Interest Debts
People often take installment loans to consolidate their high-interest debts, and this is another good reason to apply for one. Using the proceeds from an installment loan can help you save money on these debts and make paying them off easier.
To Cover the Cost of a Vacation
Some people also borrow money through installment loans to cover the costs of a vacation. If you have a vacation planned and need extra cash for it, this is an ideal way to get it.
To Assist Financially During a Life Event
There might be events that happen in your life that might cause you to need more cash. An example of this is having a baby. After giving birth, you might lose income from not working, and you might encounter extra expenses.
You can boost your budget during this time by getting a loan. The proceeds can help you make ends meet during life events.
You can use the proceeds for these reasons or others. The important part is making sure you need the money and using it for a beneficial purpose.
The Benefits That Installment Loans Offer
The last thing to know is the benefits that installment loans offer. As you can probably see already, they offer the benefit of getting cash quickly when you need it, but this is not the only benefit.
The other significant benefit of using installment loans is the way they help you build your credit. Most people are not familiar with this concept, but it works well when used properly.
When you take an installment loan, you must make the payments on the loan. When you make these payments, the lender posts them to your credit file. Every on-time payment posts as a positive mark on your credit.
The result is repeated positive marks on your credit report, leaving you with better credit. If you need some cash and want to improve your credit, get an installment loan.
The good news is that you can qualify for an installment loan with poor or no credit. Most lenders approve loans for people with all credit scores, and you should apply for one even if you think that your credit is not good enough.
Where to Turn if You Need One
Most people experience times in life when they need some extra cash. While you can turn to different loan types, online installment loans are often the best choice.
Captain Cash is a lender offering loans to people in Vancouver, British Columbia, and other Canadian provinces. The loan process is simple, and you don’t need perfect credit to qualify.
If you need money, contact us. We can set you up with a loan that will help you get by!