Always Study the Terms of Installment Loans

You should always read the fine print whenever you sign up for anything. It has become customary for most people to accept terms of service, user agreement and privacy policy while using social networks, mobile applications and various kinds of software. Lately, we accept the use of cookies when websites prompt us without even knowing actually how the companies are going to utilise the data. This is after a law has been formulated mandating companies to publish relevant information about use of cookies. Most users still do not check out the policy in detail and accept anyway.

You cannot have such a practice when you sign up for installment loans. Use of websites, apps and software that does not have any direct impact on your finances may still be acceptable but the terms of installment loans should not be taken lightly. Whether you are opting for unsecured short term loans or payday loans with only one lump sum repayment, you should always be fully aware of the applicable terms. Here are the most important aspects that often go unnoticed.

• Every borrower will consider the loan amount and rate of interest. Comparing rates of interest is one of the basic processes of choosing favourable installment loans. However, you should consider both fixed and variable rates of interest. First, you must note if the annual rate of percentage is fixed or variable. Then you should compare the various fixed and variable rates of different lenders. Finally you should study the pros and cons of both the fixed and variable rates of multiple lenders. Do the math to find out exactly how much you will be paying. You can use online calculators. Some lenders will offer you a detailed account of how much you must pay every month through the terms of installment loans. Choose a loan that effectively costs you the least.

• You should find out how much penalty or late fine will be chargeable in case you miss a deadline or fail to pay the installment one month. Installment loans may have a repayment term of more than one month to over a year. The nature of short term loans determines its potential repayment period. It is nearly impossible to know everything that may happen to you or with you during the repayment period. It is possible a month will be easier and the next may pose some financial challenges. It is not rare for borrowers to fail to repay an installment. Some borrowers fail to repay on consecutive months. How much fine and other issues you will be penalised with. Know this before you sign on the agreement.

• Check out the possibility of renewal of terms. This is not possible for all kinds of installment loans. Payday loans in particular do not have much provision of renewal but some lenders may be willing to grant an extension. This period is not necessarily a free pass. There will be, in all likelihood, some kind of financial penalty but you can expect some lenience from a few lenders.