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Personal Assessment Before Getting Installment Loans

02 January 2018, 13:51 CET

Can you afford to apply for an installment loan? Is your income enough to cover both the monthly repayments and your daily expenses? Checking your credit report should be your first step.

This document will let you know your current standing when creditors review your financial state. It will also allow you to correct any errors you may find. Here are other things that you need to consider before getting an installment loan.

Ability to Repay

You should assess your ability to repay the loan. Avoid getting more than you can afford to pay. This also means assessing your household budget. How much money do you earn every month? How much money goes in and how much cash goes out? You have to create long-term financial goals and know the kinds of funds you’re going to use to survive this tough time.

Be Wise and Persistent

Your presence of mind is very important. Shopping around can help you find a good creditor. A one point difference in interest rates could help you save a lot of money. Don’t lose hope as you will definitely find a lender who offers installment loans to people with bad credit. Make sure that you can afford the monthly payments for your own peace of mind.

Avoid Discourteous Creditors

Don’t approach a creditor with any kind of desperation. This is very important. If the creditor treats you as if he’s doing you a favor, you should walk away and look for another creditor. Remember that you’re giving them business, so you’re doing the favor. After all, if people like you didn’t exist, their business wouldn’t flourish.

Choose Between Secured and Unsecured Loan

Secured loans require you to put up any valuable property as collateral like bonds, real estate, car or stocks. Unsecured loans don’t require you to put up any collateral. The creditor only depends on your promise to pay back the loan. Secured loans have favorable repayment terms and lower interest rates since there’s collateral. Unsecured loans, on the other hand, have strict repayment terms and higher rates of interest.

You can search online to find installment loans that suit you. Traditional lenders won’t lend to people with bad credit. If they do, the terms are usually very strict and the interest rates are very high. Those with poor credit score can ask for help from private lenders. These creditors may not conduct any background check. Your chances of finding better repayment terms and interest rates are also higher.

If you still want to apply for a bank loan, you can go ahead and try your luck. The chances may be slim, but you can approach credit unions, banks or other traditional financial institutions. If you have accounts at a particular bank, you should approach that institution first. You have to be prepared to explain your credit score, how you’re going to fix it and how you’re planning to repay your loan. The bank might just approve your loan. For more information watch msnbc business channel

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