Installment loans are a little different to your traditional payday loan. They tend to be for those of us who aren't necessarily cash-strapped. More so those who are in need of some considerable funds that we may not have access to right now, but could afford across monthly repayments. For that reason, they are becoming especially popular within society. However, do you, the consumer, know the right and wrong time to be taking on out. In this post, we throw up a few scenarios and let you know if then is the right time to be taking out an installment loan. So, sit back and enjoy this free bit of financial advice!
When Buying A Home
Purchasing a home is the most expensive acquisition many of us will ever make throughout our entire lives. Almost nobody can afford to buy a home outright, so some financial support is inevitable. That begs the question, is this the right time for installment loans? These kinds of loans are actually structured exactly like a mortgage. In fact, a mortgage is actually a kind of installment loan in itself. So, this looks like a more than sensible moment to go out and get yourself an installment loan. Be sure to get yourself the best rate, though, as interest rates on installment loans can be pretty pricey!
Verdict: YES
To Consolidate Debt
If you’re in massive amounts of debt, then the whole ordeal can seem somewhat frightening and overwhelming. However, it doesn’t have to be that way. A lot of people seek professional advice when going through hard times such as these. But, take a bit of our own. Now is one of the safest times to go for an installment loan. This is largely because you know exactly what you’re going to have to fork out for each month. Plus, you'll know how long you’ll need to have to budget to be able to do it. An installment loan can, therefore, make debt management a whole lot easier. By consolidating everything you owe into one new loan, the whole ordeal seems way less stressful. Surprisingly, it’s a thumbs up from us on this occasion!
Verdict: YES
If You Wish To Renovate Your Property
Now, this one is a lot trickier. It's harder to find a straightforward answer to whether an installment loan will serve you right on this occasion. This is because there are so many variables when it comes to renovating your property. If, for example, your home is newly bought but is in a dire state and needs a complete overhaul, then yes, this would be a great time to take out a loan. In contrast, you may already own a luxurious property and want to add in a sign of excess to it, such as a swimming pool. If so, then you’re probably going to need to be in a financial situation where you can afford to do this outright. Get creative with your budget and we’re sure you’ll find a way to pay for it without the help of a loan. Alternatively, a loft conversion would add value to your property and so we recommend that. Nonetheless, it is all circumstantial
Verdict: YES (but not in circumstances of lavish excess)
When Shopping For The Holiday Season
When Christmas comes around, you suddenly have a lot more to pay for. It makes sense! Holiday gifts are expensive these days. However, whether this is the best time to take out an installment loan is up for serious debate. Do you really fancy the prospect of paying off Christmas presents beyond the normal period of January Blues? Nobody wants to be paying off the cost of children’s toys during mid-March. After all, it’s the thought that counts at Christmas time. So, unless you’re feeling flush during the holiday period, don’t put yourself into debt to get your loved ones something special. Simply buy what you can afford at the time and avoid an installment loan on this occasion. Whatever you get them will be appreciated nonetheless!
Verdict: NO
To Go On Vacation
How could does a holiday sound right about now? Everybody dreams of the chance to jet off some place exotic and exciting all year round. However, it is just not financially possible for all of us. You may feel that an installment loan is a way to get you past this limitation. However, if you can’t afford the costs of a holiday outright, then there is no way that you’re going to be able to afford the lifestyle once you are there. We’d recommend saving up for a holiday instead of plunging yourself into debt to afford one. Even when you’ve booked the flights and the hotel, that isn’t the end of it. You’ll most likely need a whole new summer wardrobe, transfers and spending money once you’re there. So, if you can’t afford the travel and accommodation outright, you shouldn’t even kid yourself that you’ll manage to pay off a whole holiday. Wait until your finances pick up a little bit before jetting off. It’ll be worth the wait and make your holiday that extra bit more satisfying!
Verdict: NO
When Treating Yourself To The Next Bit Of Tech
If there’s a new smartphone out with your name on it, then you might think that a small installment loan is your way to get hold of it on launch day. Well, whether the new iPhone, Samsung or HTC phone is all that your heart desires or not, you need to remember that these phones cost hundreds. The chances are that you already pay a fairly hefty phone bill each month for a perfectly adequate smartphone already. So, you need to weigh up whether you really need this thing after all? We reckon you probably don’t, and if that is the case, then you probably needn’t take out an installment loan either.
Verdict: NO
Hopefully, this post gives you the guidance you need when it comes to taking out an installment loan. Of course, this list is by no means exhaustive, there will be many more scenarios in which you will consider taking out a loan. Nonetheless, many of these situations are transferable. So, hopefully, you’ll be able to work out whether an installment loan is right for you or not in your specific scenario. All the best!
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