Did you know that the installment loan is one of the safest forms of lending? Not only in Belgium is this kind of lettuce so popular, but also with our northern neighbors that is the case. If you take out an installment loan, you will be rewarded for it. Installment
The benefits of an installment loan
Of course, you also want to know what the benefits of an installment loan are. This consumer credit actually has two important advantages that would not exist without each other:
1. You run the little risk as a borrower. The same applies to the borrower.
2. This results in a low-cost price!
Fixed interest rate
This type of loan has the feature that interest is fixed during the term. A fixed interest rate has the advantage that you know in advance what the total cost of the loan amounts to. This is not the case with revolving credit. After all, it has a variable interest rate. Because of the clarity of the costs, the loan is one of the most secure and transparent forms of lending. Just as the interest rate is unchanging, the term is also fixed. So you pay a fixed amount of interest and repayment on a monthly basis.
Loan on installments is relatively cheap
Many consumers opt for an installment loan because it is a clear, safe and transparent loan form. However, they ignore the fact that this loan is also relatively cheap compared to other types of loans. This is because both the borrower and the borrower run few risks. That is beneficial for the lender. Because they have extra certainty that you will repay the loan, they can also keep the cost price fairly low. In the case of riskier forms of lending (such as through revolving credit), you see the opposite happening. Flexible loans are generally expensive loans.
Building more security is always possible
The question is whether it is necessary to add extra security to this form of a loan. This personal loan on payment is in itself safe enough. Nevertheless, there may be situations where it is advisable to provide extra security. If you do not have a permanent contract, taking out special credit insurance may be a good idea. If your contract is not extended or suddenly become ill, part of the repayment can be taken care of thanks to this insurance.
Term life insurance with higher loan amounts
With small loan amounts, it is, in our opinion, a bit redundant to take out all kinds of additional insurance policies. If, however, you borrow a larger amount, a term life insurance policy would not be a luxury. If only to prevent your family from getting into trouble if you die or become incapacitated for work. Note: It is not always possible to take out this insurance with the same bank or lender. In many cases, that is not wise either. It is best to compare this product with multiple providers so that you do not pay too much. With yet other credit providers you are obliged to take out such insurance for an installment loan.