It can be said that the phrase “installment” is not too strange for many people. In today’s life, there are many installment payments. For example, buying a car with installment payments, buying a mobile phone with installments … This method is applicable when you do not have enough money to pay in full. And now you can also borrow money on installments.
So how to understand the true meaning of this loan form? Basically, installment loan is a method of borrowing money when the amount of debt to be paid in each period is always the same. The interest payable plus the principal divided to repay the loan. The amount to pay the debt in each period is always equal according to the agreement of the borrower and lender.
Or say more easily, this is the form you can borrow a certain amount of money. Each month of the year you will pay the amount in installments until the loan is due. In which the payment amount includes both principal and interest. This is a service that serves the needs of “I need to borrow money urgently” of many current users.
Most installment loan terms are based on 1 month, 3 months or 1 year. Depending on the borrower’s needs as well as the financial capacity, the terms will be different. Lending interest rate is agreed by the lender with the borrower in accordance with the regulations of the State Bank.
Popular forms of loan repayments
Installment loans were born to bring many effective solutions for customers. So nowadays, loan forms are becoming more diversified to meet the borrowing needs of everyone. There are 3 main types of loans that are most commonly classified by product packages. Because the debt payment terms are the same. When it is due, you will need to pay both principal and interest. And specifically those 3 forms are:
Monthly installment loan
Monthly installment loan is the first choice in all 3 forms. This is an installment loan service without the need to mortgage the related assets. With this method, the borrower will pay the debt monthly. When borrowing, customers will receive the loan directly at the bank through the ATM account.
The amount is borrowed in the form of monthly installments
With a monthly installment loan, customers can borrow at least 10 million dong up to 70 million dong. Even the largest loan can reach VND 500,000,000. Loan tenor at banks is applied quite a long time. Mostly from 6 months to 36 months. So when paying for a loan, flexibility comes first.