It’s important to familiarize yourself with several key financial terms. Especially if you’re in the market for a personal loan. This type of loan is a common personal loan, and if you’re considering one you should know all the ins and outs. Read on if you want to define installment loans, and learn more about them in general.
What Is an Installment Loan?
An installment loan is any loan that a borrower repays through a series of monthly payments, or “installments.”
To fully understand this type of loan, you’ll need to know that there are several different types of them, including personal loans, mortgages, student loans, auto loans, and more. The defining characteristic of these loans, is that the borrower makes several (at least two) payments over the life of the loan.
These loans will vary in size, purpose, and repayment length. Depending on the type of loan you get, you may be repaying it for a couple of months, all the way up to 30 years or more.
Types of Installment Loans
These are some of the most common types of loans out there, so there are many different forms that they take. Here are the most common types of installment loans you may apply for:
Personal Installment Loans
A personal installment loan is a good alternative to other higher-interest personal loans like payday and title loans. These personal loans can be used for any unexpected expenses, bills, or repairs. The repayment term can last a couple of months, up to a couple of years depending on the loan and lender.
A mortgage is a house loan. And these are some of the largest loan amounts you can get depending on the cost of the house, and the lender. Most mortgages are paid back over the course of 15 or 30 years.
A student loan allows borrowers to pay for higher education. These can be very large loans as well, but they typically have low interest rates. You can take out a student loan from a private lender, or from the government. The repayment terms tend to last many years but again will depend on the lender and the terms of the specific loan.
Installment Loan Interest Rates
Interest rates vary greatly from personal loans to auto loans, to student loans, and everything in between. But the important thing to remember is that proper research and shopping around for the right lender can save you money.
The interest rate for your loan will depend on several factors, such as:
- The type of loan
- The lender you choose
- Your credit score
- Income and ability to repay
- Your credit report/borrowing history
If you’re not sure if you’re getting a good interest rate, start asking around. Check out other lenders and see what rate they offer. And start working on improving your credit score so you can get the best interest rate possible.
Is a Credit Card an Installment Loan?
The short answer to this question is: no, it is a separate financial product. But a credit card wouldn’t be considered a loan or a line of credit either. The main differences between the two would be the interest rates, the repayment, and how they’re both used.
While an installment loan provides a borrower with a lump sum of money that they pay back over time, a credit card is more of an ongoing account that the customer can pull money from and there are no set end dates to the account.
As long as you keep the account open and in good standing, you can continue to use your card, and pay it off.
Installment Loans for Bad Credit
If you’re in need of a personal installment loan, and your credit is less than perfect, look no further. CreditNinja offers personal installment loans for borrowers with poor credit scores. Our loans can also help you pay those unexpected expenses, and get your finances back on track.
The best part is that you won’t even have to leave your home to get a loan. Just apply online, get a decision right away, and if approved your loan will be deposited into your bank account. We’re here to help, apply today and find out why so many people are choosing CreditNinja.