Several ways to get a loan in small installments
There are several ways to get a loan in small installments. On the one hand, the loan amount can be very small and on the other hand, the term of the loan can be very long. Many banks offer terms between 12 and 84 months. If the requirements are met, the terms can be extended to 120 or even 180 months. However, this assumes that the borrower has a secure income.
A loan in small installments has a number of advantages.
In this way, families who have only a low income can also fulfill larger consumer desires. Monthly loan installments of 30 to 50 USD only have an insignificant impact on the household budget and can almost always be raised without any problems. In this context, it should not be forgotten that the interest on such a loan is significantly higher than the interest on a loan with a shorter term.
In this way, the bank wants to hedge against a possible default risk on the part of the customer, which is very large for a loan with a long term. Even if a loan seems tempting in small installments, it should only be taken out when there is an urgent need for financing. This is especially true if a customer has already run several loans and now wants to take out another loan. Smaller credit rates that have to be serviced regularly can grow almost imperceptibly into a larger sum of money that is very difficult to finance with a small income.
In certain circumstances, it may also make sense to replace an old loan with a new loan in small installments or to combine several loans into a single loan. Regardless of what the decision ultimately turns out to be, it would be very important that the monthly rate be chosen so that it can be easily managed with the available income.
Application and approval
Similar to many other installment or consumer loans, a loan can be applied for in small installments over the Internet or in a bank branch. Both variants have advantages and disadvantages. In a bank branch, direct communication between the customer and the bank is possible, which means that open questions can be clarified immediately. An online loan application can be made around the clock and will be processed within a few hours.
A preliminary loan decision can be made after just a few seconds. This decision is based solely on the customer’s credit bureau information, which should be as positive or at least neutral as possible. Otherwise, serious problems can arise, which can lead to the rejection of the loan application.
Loans without credit bureau from Switzerland are an exception, as they only require a fixed income and a secure job. They are also available for German citizens and do not have to be applied for on site. A reputable credit broker is happy to help with the search.