If you are looking to take out a loan and you have the option to spread the loan out over a short period of time, instead of just a couple of paydays, then you want to take the longer term option. When you have more time to pay the loan back, and you are able to get more money with a larger loan, it can make having the loan easier. Here are a few reasons why you want to consider getting a loan that has 6 month payment terms or longer.
6 Months is a Manageable Time Frame
A six month loan is better than a short term loan that is due within the next few paydays because it allows the following:
- Smaller more manageable payments
- More time to budget and plan for the payments
- Months to report to the credit bureaus
When you take a loan and you have a few months or more to pay back the money, the loan isn't going to put as much stress on your mind and your finances.
Work Towards Building Credit
Each month that you make the payments to the loan company, they will report that you paid the loan responsibly. This will help you build your credit history and improve your credit score. The longer you pay on time, the more credit you build, and the better it is as you try to improve your rating and to get future loans.
Compare the Interest Rates
The different interest rates that are available to you can depend on your current credit rating. Compare what rate different loan companies will give you, so you can save the most money possible over the time that you pay the loan. You may have to pay a high interest rate the first time you take out a loan, to show that you can pay the loan back on time if needed.
If you are in desperate need for a loan and you don't think that you can pay off a loan in a short amount of time, try to find a 6 month loan option so you can spread out the payments and to borrow more money. There are a lot of great loan providers that will allow you to spread out your payments over a 6 month time span, allowing you to pay off the installment loan and build your credit at the same time.