An installment loan is the issuance of funds by a bank on terms of equal repayment. First of all, it is worth knowing four main properties of a loan:
repayment – the borrower can take a certain amount, but at the same time he/she undertakes to return them.
payment – no matter how profitable the loan is – it is always a bank service, and you will have to pay for it.
urgency – when applying for a loan, the terms in which the borrower will repay it are strictly written down.
differentiation is a special approach in each individual situation.
The installment loan can be targeted or non-targeted. An non-targeted loan is a loan that the borrower spends at his own discretion, without coordinating it with the bank. Target loans differ into several types, depending on the purpose for which they are taken:
- auto loan;
- land loan;
- consumer loan;
- educational loan;
- brokerage loan;
You can also divide installment loans into several types, depending on how the funds are received by the borrower:
- cash loan;
- on card;
- credit line.
Terms for taking a loan
The terms on which a borrower can apply for a loan vary greatly depending on the bank, the financial condition of the borrower himself and the purposes for which the loan is being issued.
Banks offer a variety of lending terms, including a loan to retirees, for urgent purposes, another option is a loan, the interest rate of which becomes more or less profitable depending on the number of papers provided.
When applying for an installment loan in any bank, you will need to fill out the borrower’s applicaion form and contact a bank employee. To do this, there is an online loan application, in addition, some banks allow you to apply for a loan completely online, however, when applying for a loan for a large amount, you will most likely need to visit a bank branch.
Further, the bank employee, based on the borrower, will determine the loan terms, such as the interest rate and the credit limit. The loan will be all the more profitable, the more efficiently the borrower can prove that he will be able to repay the debt. This means that the bank will check the client’s solvency, including in the long term. To do this, the bank requests certain documents from the borrower.