Utilising Instalment loans offer a good alternative to payday loans. Something that’s especially useful if you have poor credit ratings. This also applies to anyone looking to borrow a larger amount or over a longer term than payday loans offer.
Unlike UK payday loans, instalment loans let you pay back money in instalments over a set time. You can also pay over the term of the loan. This allows you to budget more easily. Payday loans generally have a much stricter payment structure. Usually a single lump sum payment. This can result in you missing your pay date and accumulating, even more debt.
If you’re utilising Instalment loans, you usually have lower interest rates than payday loans. Also, the amount that lenders are willing to lend is generally higher.
Unsecured, instalment loans don’t need any assets like a house secured against the loan. They also don’t typically need guarantors either.
Many lenders offer you the chance to build your credit rating. They do this by reporting repayments to a credit reference agency. If this is an important aspect of the loan, it’s worth checking with the loan provider whether they do this.
Utilising instalment loans. Who are the best UK providers?
The four main players in the instalment loans arena are:
On Stride offers loans between £1,000 and £10,000 with loan durations between 1 and 5 years. Depending on your credit history, On Stride offer interest rates ranging from 29% to 89%. If you borrowed £2,500 for 24 months, at repayments of £149.93 per month there would be a total repayment of £3,598.32 (with the representative APR at 45%).
On Stride say that there are no hidden charges or late fees. Despite this, it’s always worth checking the small print before signing up for any loan.
AvantCredit’s instalment loan durations range from 12 months to 60 months. They offer loans ranging from £1,000 to £20,000 with APRs from 9.30% to 79.99%. A good example is, if you borrowed £3,000 over 36 months with a 48.20% representative APR you could expect to pay back £145.65 per month. This makes the total amount repayable over the duration of the loan £5,243.40.
AvantCredit also boasts a fast, online application system, plus the ability to get funds to you within the same day. They have no setup, arrangement or early repayment fees.
118 Money offer loan amounts between £1,000 and £5,000 for terms of 12, 18 or 24 months.
Their website says they can make a decision within an hour (most of the time). If approved, you can get the money in your bank account within 24 hours.
For example, if you £2,000 borrowed from 118 Money over a period of 2 years at a representative APR of 99.9%, the monthly repayments would be £158.42. This would make the total amount repayable £3,802.08.
Pounds to Pocket offer instalment loans varying from 6 to 12 months in duration with a maximum loan of £2,000. They say after approval, they are able to get the cash sent to your bank account within 10 minutes.
For instance, they could offer £600 for 12 months at repayments of £95.37 per month. This results in a total repayment amount of £1,144.44. £544.44 of that amount would be interest, at a representative APR of 278%.
Pounds to Pocket mention on their website there are no hidden fees. Yet if the borrower misses a payment, they’ll have to pay a late fee of up to £15.
Final thoughts on utilising instalment loans
There are many benefits to utilising Instalment loans over the alternatives. With help from the above, you should have all the information you need to choose one that’s ideal for you.