what are installment loans

An installment loan is a type of loan that is repaid over time with a set number of scheduled payments, usually monthly payments. The term of the loan may be as little as a few months and as long as 30 years. Examples of installment loans include personal loans, auto loans, mortgages, and student loans. Installment loans are different from revolving credit, such as credit cards, because you borrow the funds all at once and cant get more money without applying for a new loan. Installment loans can be secured with collateral, like a car, or unsecured. The advantages of installment loans include flexible terms and lower interest rates than credit cards, while a major disadvantage is the risk of default and loss of collateral.