{"id":32,"date":"2022-10-25T13:10:17","date_gmt":"2022-10-25T13:10:17","guid":{"rendered":"https:\/\/flexmoney.com\/blog\/?p=32"},"modified":"2025-10-27T00:31:10","modified_gmt":"2025-10-27T00:31:10","slug":"installment-loans-5-reasons-they-are-your-best-choice","status":"publish","type":"post","link":"https:\/\/flexmoney.com\/blog\/installment-loans-5-reasons-they-are-your-best-choice\/","title":{"rendered":"Installment Loans: 5 Reasons They Are Your Best Choice"},"content":{"rendered":"

Installment loans, or cash advance loans<\/a> are usually your best choice when you need to borrow money. However, you need to choose wisely to ensure you\u2019re getting the best product and lender.<\/p>\n

Here are 5 reasons installment loans are your best choice over other borrowing options. We\u2019ll also discuss what to look for in installment loans and lenders.<\/p>\n

1.\u00a0\u00a0 Installment Loans Offer Fixed Payments<\/h2>\n

Installment loans have fixed payments, regardless of what happens with interest rates. Once you obtain your loan, your payment is locked in until the end of your contract.<\/p>\n

Obviously, this is a great thing when you\u2019re trying to manage your finances. You can budget for the payment and you\u2019ll know precisely when you\u2019ll pay off your loan. Plus, your timely payments on your installment loan could improve your credit score<\/a>. This isn’t the case with payday loans. You can read more about the differences between them here<\/a>.<\/p>\n

Your payment amount revolves around how much you borrow and the interest rate the lender offers. Your interest rate depends on your ability to repay, other factors such as your credit, and the lender.<\/p>\n

Installment loans can be used for almost any reason. Borrow to consolidate your debt, make a major purchase<\/a>, repair your car, manage summer spending<\/a>, do home improvements<\/a>, pay for a medical treatment<\/a> or wedding, take a vacation, or pay for a move. A good lender offers installment loans for almost anything. They’re flexible<\/a> and incredibly convenient. Their consistency make them easy to fit into a loan repayment strategy<\/a>.<\/p>\n

2.\u00a0\u00a0 You Won\u2019t Pay Compound Interest<\/h2>\n

This is an important consideration, because compound interest accumulates quickly. Credit cards<\/a> charge compound interest which is basically interest that builds on an unpaid balance. Here\u2019s an example.<\/p>\n

You decided to charge $5,000 on your credit card. It provides a 28-day grace period. If you had paid off the entire $5,000 before that time, no problem. You wouldn\u2019t pay interest.<\/p>\n

However, you didn\u2019t pay off the balance on their credit card. If you had the money in your bank account, you would have used debit instead. Instead, you wanted convenience. Your credit allows you to pay whatever amount you want, providing you pay at least the minimum payment amount.<\/p>\n

Problems with Compound Interest<\/h3>\n

Since the average interest rate on a credit card is between 19% and 29.99%, interest can grow quickly. Plus, interest is charged daily, not yearly by the Annual Percentage Rate (APR).<\/p>\n

In this case, your card has a 19% APR. This is divided by 365 days to determine a .052% daily rate. This means you pay $5,000 X .052, or $2.60 every day there\u2019s a balance. On day one you owe $5,002.60. This may seem reasonable, until you realize that your balance increases daily. Your debt can grow quickly, because you must pay interest on the principle and added interest until you pay off the balance.<\/p>\n

Simple Interest is a Better Option<\/h3>\n

Luckily, installment loans don\u2019t have this issue. You pay simple interest. Interest is calculated beforehand based on the amount borrowed, length of the loan, and the interest rate. This amount is divided equally between all your payments. It does not build on the unpaid balance, which saves you considerable money. Consequently, an installment loan can be a great solution if you want to manage holiday expenses<\/a> or pay for a small home repair loan<\/a>. In the last example, an installment loan may be considered good debt<\/a>.<\/p>\n

Furthermore, long-term installment loans are often a better choice than buy now, pay later<\/a> options since interest rates are much lower. That’s why they are often the best choice for big purchases<\/a>.<\/p>\n

3.\u00a0\u00a0 You Can Easily Shop for the Best Deal Online<\/h2>\n

Interest rates can vary drastically between lenders and a good online lender makes it easy to apply. However, you shouldn\u2019t apply randomly through multiple lenders. Plus, you should understand the consequences when you choose in-person loans, rather than online loans<\/a>.<\/p>\n

Instead, choose lenders that use a no obligation pre-approval process. The pre-approval process relies on a \u201csoft\u201d credit inquiry that does not affect your credit score. You can safely compare what each lender offers without worry. The lender should mention pre-approval, otherwise they may use the traditional method of checking your credit.<\/p>\n

The traditional method involves a \u201chard\u201d credit inquiry. Banks, credit unions, and some online lenders choose to use this method as it provides them with in-depth credit information. However, this method has a bad side effect that can negatively impact your credit, whether the lender grants you a loan or not. It can lower your credit score by as much as 12 points. Plus, the inquiry stays on your credit file for up to three years and there\u2019s no telling when your credit score will return to normal. Credit reporting agencies suggest it is \u201ctemporary\u201d, but who knows what that means.<\/p>\n

Additionally, if you apply through too many lenders using a hard credit inquiry it can send up a red flag on your credit report. It may appear you\u2019re struggling to obtain credit, rather than just shopping around for the best rate. Clearly, the pre-approval process benefits you, the consumer. Otherwise, applications could negatively impact your credit scores<\/a>.<\/p>\n

4.\u00a0\u00a0 Online Installment Loans Offer Convenience<\/h2>\n

Certainly, credit cards are convenient. However, online<\/a> lending has made the process of getting installment loans very fast<\/a>, simple, and easy<\/a>.<\/p>\n

You don\u2019t need to take time out of your busy schedule for an in-person appointment. If you choose a good lender, you won\u2019t need to fill out a lengthy application form either. As a result, an online installment loan is a great option when you’re especially busy, such as when you need to handle an emergency, splurge a little during the summer, want to deal with a dental<\/a> problem, or you are moving.<\/a><\/p>\n

Online lenders often have less stringent requirements than banks and credit unions too. They often don\u2019t need more than three months of home, income and banking stability. Additionally, they use digital income verification which is far more convenience for you since you do not need to provide pay stubs, a letter from your employer, or an income statement. Everything\u2019s done safely and quickly through a bank snapshot of your direct deposits. You can find more information on applying for loans online here<\/a>.<\/p>\n

5.\u00a0\u00a0\u00a0\u00a0 Fast & Efficient<\/h2>\n

A good lender tells you their requirements so you don\u2019t waste your valuable time. Their application form is simple and straightforward and should take less than 15-minutes to complete.<\/p>\n

Applying online through a good lender also means you\u2019ll enjoy a fully-automated process. There\u2019s no sitting around waiting to find out whether you\u2019re approved. You\u2019ll have your answer in minutes. It’s fast<\/a> and efficient. Consequently, their great when you need to deal with medical expenses<\/a>, an emergency, <\/a>\u00a0a fast summer getaway, <\/a>or fall expenses<\/a>.<\/a><\/p>\n

The pre-approval process is also instant<\/a> and allows you to see what the lender offers. Don\u2019t like what you see \u2013 no problem. Continue shopping and never worry about your credit.<\/p>\n

Should you want to move forward, the process is simple. Just accept the terms to trigger the creation of your loan contract. The lender sends it to you and you sign it digitally. In turn, this triggers the funds release.<\/p>\n

A good lender could have money in your bank account within hours if you sign during business hours. If you sign in the evening or on a weekend or holiday, you can expect your money the next business day. This is truly one of the methods for cash advance loans<\/a>.<\/p>\n

Luckily, establishing credit<\/a> through an online lender doesn\u2019t mean you won\u2019t enjoy good customer service. In our digital age, a good lender still offers a toll-free number where you can talk to a real person. However, you should also be able to connect via chat, email, and website support. Of course, a good lender also empowers you with an in-depth FAQ so you can easily find answers to common questions.<\/p>\n

FlexMoney Installment Loans Are Your Best Choice<\/h2>\n

If you\u2019re looking for an installment loan, FlexMoney can help. We offer much more than our competitors and have a great reputation. Here are just a few reasons to consider us for installment loans:<\/p>\n