Small dollar installment loans are useful for someone who needs cash quickly to cover an unexpected expense. An installment loan allows you to repay your loan in small scheduled installments. We’ve outlined some key points below to help you understand how installment loans work and what you should consider before you decide to apply for an installment loan. This information is helpful if you’re in a bind and wondering if you should apply for this type of loan.
Repay Over Time, Not All at Once
When emergencies happen, getting the cash you need through a payday loan can be easy. However, sometimes there are unexpected circumstances and you may not be able to pay back the payday loan in full on your next pay day. Installment loans provide the advantage of allowing you to spread out your payments over a longer time period to ease financial stress.
Pay off Early
If you plan to repay your loan faster than the planned installment schedule, make sure you find out what your payment options are. Just like MoneyKey loans, you’ll want to make sure there are no pre-payment penalties. Even if early pay off doesn’t turn out to be an option for you, you should always know the total cost of your installment loan. Keep in mind, the sooner you pay back your loan; the less interest you’ll pay in the long run.
Understand your Payments
Most installment loan due dates are based on when you receive your income. If your loan requires your bank account to be debited, make sure you are clear about what is going to happen on your due date. This is especially important if any of your pay dates fall on a holiday or weekend. If your income deposits a day before or after a certain date, you’ll want to be honest and notify the lender to avoid any unnecessary charges by either the lender or your bank.
Installment loans can be a flexible way to get the cash you need in a payback format that suits your needs. While small dollar installment loans are meant for short-term emergency expenses, they are not meant to be used as a long-term financial solution. You should make sure you understand the cost of your loan, what your pre-payment options are, and that your payment schedule is correct to avoid paying back more than you should.