Instalment loans might be a type of loan that you do not know much about and it is likely that you have not used them before. Therefore, you might want to make sure that you know a bit more about them and then if you do need a loan, you will know whether this one will be suitable. Perhaps you might start by finding out what you can buy with them.
What can I use instalment loans for?
You might be wondering whether there are any restrictions on what you can use instalment loans for. Some loans have very specific uses such as a mortgage has to be used to a pay for a home. There are other types of borrowing which you are a bit restricted with use too such as a credit card which has to be used for buying things but cannot be used to pay rent. You may therefore wonder whether there are any restrictions on instalment loans.
The lenders will not dictate to you what you have to spend the money on, which means that you can buy whatever you want with it. However, the money will go into your bank account so if you need cash, you will need to draw it out. However, that should not be too much of a problem as long as you have a bank card, PON and have access to an ATM.
How might I be restricted?
There are some features of an instalment loan which might restrict what you use the money for though. The first thing is the amount that you can borrow. No loan is limitless is the amount of money that you can borrow and an instalment loan is the same. In fact the amount you can borrow might be rather small compared to some other types of loans. Lenders will normally let borrowers have between £100 and £1000. This should be enough to cover an emergency or to cover a few bills or some food. However, if you want a significant chunk of money, then you may need to look elsewhere.
You may also be restricted by the length of time you have the loan. An instalment loan will tend not to last very long. Although this can be great, as you will be out of debt nice and quickly, it will mean that you will not have many repayments. So, if you borrow a lot of money, you may find it difficult to manage the repayments as they will be large. You therefore need to be careful to make sure that you are able to manage these repayments. If you miss a repayment you will end up paying a fee and therefore the loan will cost you more money and you want to avoid this if you can.
Are they right for me?
It is a good idea to make sure that you are getting the right type of loan for you. However, it is not easy to identify what this is. This is because your financial needs are likely to change through your life. You might need to buy a house, a car or a washing machine and the loans you need for each of these things will be different. You may also find that at times you have a really good credit rating and other times you do not and this will have an impact on the loans that you can take out.
It is worth knowing that an instalment loan can be arranged very quickly and in some cases it can even be possible to have your money within a few hours. This means that if you need money in an emergency, you may find that they are one of the fastest ways to get your money. It may also be useful to know that you can get an instalment loan even if you have a poor credit report. This can be really handy for anyone that needs money but cannot get other loans before they will not lend to someone they feel is too risky.
Therefore, this means that it is really wise to get a good idea how all sorts of different loans work. Then when you need one, you will be able to more easily identify which type will be the right one for you.
So, a very easy answer to what can you buy with an instalment loan, is pretty much anything. However, there are a few features of the loan which might mean that it is not so suitable in certain situations. However, you never know when you might need one, so knowing how they work and then making sure that you include them in research when you are deciding on which loan to take out next time you need one, will be worthwhile.