Posted: Wed Apr 07, 2004 3:39 am Post subject: Installment Loan - The Types and Advantages
Installment loan is a consumer loan in which principal and interest are paid off through equal monthly payments.
Installment loans are generally taken to purchase home, car, furniture etc. The loan comprises of specified amounts that are to be repaid over a predetermined repayment period. The payments can include both the principal and the interest or it may contain only the interest amount with the principal being paid in a lump sum amount with the final loan installment.
Installment loans are available in the market as:
Unsecured loans:
These loans are riskier for lending institutions and are hence available at higher rate of interest. The loan is available only if the borrower has a good standing in terms of credit score, payment history and job status. Example; Personal loans, student loans, etc.
Secured loans:
These loans are offered by the bank or a financial institution against collateral. The bank can even sell the property if the loan isn't paid back. The interest rates for secured loans are comparatively lower than unsecured loans. Example; mortgage home equity loan, home equity line of credit are secured loans.
Why borrowers prefer Installment loans
There are certain advantages of dealing with installment loans which makes them a preferable choice.
Borrowers are aware of the amount of monthly payment that they have to make and the time period allowed to pay off the loan. So they can take the right financial move by planning a proper budget.
Installment loans have extremely competitive rates which vary in the 5 to 7 percent range.
Repaying an installment loan includes interest payments and after a certain period, an increasing portion of principal amount is also paid back. This helps in steady reduction in the principal amount during the loan term.
lauryn Guest
Posted: Thu Oct 23, 2008 8:21 pm Post subject: loans
Loans for home are known as mortgages. Installment loans are named so because the borrower will be paying the amount in installments. Are you planning to take a loan for buying a house?
Thanks. _________________ Good is the Enemy of Great.
eiry Guest
Posted: Thu Jan 08, 2009 7:18 pm Post subject:
what are the differences between an open-end installment loan and a fixed installment loan?
As far as I know, a fixed installment loan is paid off with a number of equal periodic payments whereas an open-end installment loan is paid off with variable monthly payments. The Credit card loans are open-end installment loans.
Thanks,
Jerry
Phil JACKSON Guest
Posted: Thu Apr 16, 2009 3:11 am Post subject: OPENEND LOAN
CAN I PUT MONEY INTO THIS LOAN AND PAY BILLS FROM IT?
Do you want to take an installment loan and pay off your bills with the loan amount? Can you explain what exactly your situation is?
estvan horvitch Guest
Posted: Sun Jul 19, 2009 8:40 am Post subject: instalment loan on a mobil home
my loan is an instalment loan on my mortgadge. it is called an instalment loan. i am unable to repay will and can they foreclose on my home.the instalment loan is just for my mobile home?? thanks
Sam
