An instalment loan is one whereby the total amount borrowed plus interest and relevant charges can be paid back in instalments over an agreed period of time. There are a number of different types of instalment loan. Usually, instalment loans request repayments occur once monthly over at least two months, however some also allow weekly repayment schedules and some are long term, such as a mortgage for example. As a result, instalment loans are often a more sensible choice if the amount being borrowed is one which would be unrealistic to pay back in one lump sum. A mortgage is most commonly the largest instalment loan that people will incur during their lifetime. It is simply not feasible to pay this back in one go for most, so the borrower and lender will agree on a monthly repayment figure which will span over a number of years.
In some cases, the monthly instalment will be consistent over the period of the loan. This enables a budget to be drawn up so the borrower can allocate sufficient funds each month, offering flexibility and manageability. Such loans can also come with competitive interest rates.. When you start paying back the loan, most of your money is interest. However, over time, you start paying an increasing part of the loan principal also. Experts call this increasing and steady reduction of the main amount, amortization.
Sometimes instalment loans are secured against the item they are purchased for, for example, with a mortgage, it would be the house, but it could be a house, boat or car. This is so if repayments are missed, the lender can repossess this collateral and sell it in order to pay off the outstanding loan amount. Occasionally, the interest rates of such loans are lower than those of unsecured loans; either way all fees and interest rates should be listed in the original loan agreement. Before you take out any loan, you should be made aware of all charges before signing for the loan.As well as long term instalment loans, short term instalment loans are becoming increasingly popular. They allow for a small amount of money to be borrowed to cover unforeseen circumstances, which can then be repaid in instalments, usually over 3, 6 or 9 months. The reason they are growing in popularity is their flexibility and the speed in which the money can be received by the borrower. Most short term instalment loan companies pay out within 24 hours of approved application, however some can be as quick as 1 hour, using online 'faster payment' systems.
Being accepted for an instalment loan may differ from lender to lender however, all will have certain criteria that a potential borrower must meet to be successful in an application. This will usually include passing multiple affordability and bank verification checks. A person's credit score may reduce the likelihood of acceptance if it is low and highlights unpaid or outstanding debts. Checking your credit score regularly will ensure you do not miss any marks that could result in rejection from credit.
It’s really important when you’re looking for an instalment loan that you choose a lender that is being responsible. It gives you peace of mind that you’re not going to be given a cash loan you can’t afford or be charged big fees without knowing. And remember, If your instalment lender is being responsible, don’t forget you should be too. Always give the absolute truth about what you earn and can afford. It is in your best interests and should ensure you are not falling into financial hardship.
Before you take out a PiggyBank instalment loan, you need to ask yourself whether borrowing money is the right thing for you. If you can cut down on your spending or put off buying something until you’ve saved for it, do that. If you are borrowing money to make repayments on other loans and debts, you may be in a vicious circle and it might not be the best thing to do. If you think you need help with your debts, you can contact the Step Change Debt Charity service at www.stepchange.org.
What is an Instalment Loan?
An instalment loan is a short term cash solution that is used to cover an unforeseen expense that might arise due to a family emergency, an unexpected bill, a problem with the car, or needing to replace a broken appliance.
PiggyBank instalment loans are flexible! You can borrow from £150 to £1000, and choose to pay it back over 2 to 5 months.
We also offer short term loans if you'd like to borrow a little less and repay sooner.
What's the Process?
Use the slider to choose your short term loan amount from £150 up to £1000. You can choose to repay anywhere from 2 up to a maximum of 5 months.
Complete our simple online applicaiton form. We'll ask you for your personal details, your employment information, your income and expenditure, and your bank account details.
We will assess all the information you provide, send you a mobile pin and if approved we aim to pay your loan out within an hour.
What if I Can't Repay?
We understand that sometimes your circumstances can change for the worse in a way that’s completely out of your control.
If this happens, it’s our “PiggyBank promise” to you that we’ll be understanding and work with you to come up with a resolution to get your short term loan paid back.
It’s a process we call “Responsible Collections” and it’s all part of our philosophy of making finance a friendlier and more human place for our customers.