There are small purchases and big purchases, but even if you have the financial capacity to pay them back, it will still be a big blow to your finances–something that can trigger alarms when it comes to your credit score.
In these situations, paying on an installment basis can be an option.
When Taking a Loan
Ogden’s lenders offer different kinds of installment loans to suit people from all walks of life. The loan payment scheme will depend on your monthly income, the total amount of your loan, and even your credit score.
For loans paid on installment, the lender could choose to arrange a payment schedule that is monthly, quarterly, or yearly, depending on the agreement. Different schedules mean that the interest rates would vary slightly, depending on the agreed payment scheme.
When Buying Appliances
When buying something that is expensive but you expect to use for years, it’s preferable to pay on an installment basis so the price won’t dent your monthly budget. Some shops and brands offer zero-interest rates, with terms ranging from three months to two years depending on the full price of the product. Credit card companies also have an option to change the payment terms for your purchase, provided that it reaches the minimum amount they require.
When Constructing a Home
You can get a home construction loan in a lump sum, but lenders would recommend getting a portion of the loan amount in installments. This means that you need to complete a certain stage in the construction before new funds are released. It’s a safeguard to help you remain on track with the home construction and to prevent you from overspending on a certain stage.
Installment arrangements are there for several reasons: to help you afford expensive purchases and to help build your credit score. Just make sure you are on top of your payments.