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Sam

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.

Guest

What is an Installment Loan called for a house?

Niicss · Posted: Fri Oct 24, 2008 2:29 am Post subject:

Hi lauryn!

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.

Guest

what are the differences between an open-end installment loan and a fixed installment loan?

jerry · Posted: Fri Jan 09, 2009 4:23 am Post subject:

Hi eiry,

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

Guest

CAN I PUT MONEY INTO THIS LOAN AND PAY BILLS FROM IT?

savior70 · Posted: Thu Apr 16, 2009 5:12 am Post subject:

Hi

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?

Guest

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

Guest

I have an installment loan for my mobile home. I also have a mortgage for a real home. They are not the same. Hypothetically, I could foreclose on my house mortgage but not on my mobile home installment loan. If I were to default on that they take my mobile home away and I have to pay the diffference between what they get at auction and what is owed. My installment loan for my mobile home is written for personal property, not real estate.

marcusbradychl · Joined: 03 Mar 2010 Posts: 6 1.99 Dollars($)

It is roughly ideas about this.......
Installment loans are costumer payday loans to pay monthly installment of your amount.There are some real advantages of installment loans over other types of short term loans like: payday loans, cash advances, personal loans secured bad credit loans and unsecured bad credit loans.

Guest

My credit score dropped by 100 points over the last year. I contacted Equifax and asked them what were some reasons why my score would drop. Mind you, everything on my credit is paid on time/never late. I only have 1 mortage loan, 2 major credit cards and 2 other cards. None of them have high balances at all. They said one of the reasons is I have no Installment loans. Should my mortgage loan be considered an Installment Loan?

Niicss · Posted: Mon Oct 04, 2010 3:34 am Post subject:

As far as I know, your mortgage loan should be considered as an installment loan as it is secured against a collateral and you pay equal amount of money toward the interest and principal balance.

Guest

Can I still claim the finance charges on my taxes if I refinance my home from a mortgage to an installment loan? What if down the road, I wish to take out a 2nd or open a line of credit against it?

Posted: Wed Nov 10, 2010 2:10 am Post subject:

I don't think you'll be able to claim finance charges in case of an installment loan.

Guest

what are mortgages?

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Installment Loan - The Types and Advantages