Installment loans can have these downsides also:
- Insufficient flexibility: if you want to borrow a group amount—say, to get a car—an installment loan is perfect. However, if you’re not sure how much money you’ll need, you might be better off using revolving credit due to its flexibility if you may need additional funds later, or. Fixed interest levels can certainly be a drawback; as they suggest constant monthly obligations that could make budgeting easier, your rate won’t decrease if market conditions change.
- Possibly high prices for many borrowers: according to your credit together with installment loan kind considering that is you’re typical prices might be more than prices on revolving credit lines.