n. (context banking finance English) A loan that is repaid over time with a set number of regularly scheduled payments. A mortgage, for example may be considered a type of installment loan.
n. a loan repaid with interest in equal periodic payments [syn: installment credit]
An installment loan is a loan that is repaid over time with a set number of scheduled payments; normally at least two payments are made towards the loan. The term of loan may be as little as a few months and as long as 30 years. A mortgage, for example, is a type of installment loan.
The term is most strongly associated with traditional consumer loans, originated and serviced locally, and repaid over time by regular payments of principal and interest. These “installment loans” are generally considered to be safe and affordable alternatives to payday and title loans, and to open ended credit such as credit cards.
In 2007 the US Department of Defense exempted installment loans from legislation designed to prohibit predatory lending to service personnel and their families, acknowledging in its report the need to protect access to beneficial installment credit while closing down less safe forms of credit.
A problem with installment loans occurs if they have a high interest rates. The interest rate of loan will increase as the installment duration increase. Although there are many lenders and companies which are providing online loans on installment but one should carefully read the terms and conditions to get loan. Companies providing the loans with no credit check can have charges and fees not clearly presented up front.