Understanding what an installment loan is helps you avoid confusion and bad borrowing decisions. This type of loan is very common and is used for things like education, electronics, medical bills, or personal needs. The key feature is simple: you repay it step by step.
5 Things to Know About Installment Loans:
- You receive the money once — as a single amount at the beginning.
- You repay in fixed monthly payments — the same amount every month.
- Each payment includes interest — so the total cost is higher than what you borrowed.
- The loan has a clear end date — for example, 6, 12, or 24 months.
- Missing payments can hurt your credit — consistency matters more than speed.
👉 An installment loan is predictable and manageable — if the monthly payment fits your budget.