Grace Enfield, Content Writer
@grace_enfield
Two of the most common types of installment loans are personal loans and mortgages. Both personal loans and mortgages offer lump sums of money that borrowers get up front and then have to repay in equal installments over time, usually monthly.
2 Common Types of Installment Loans
Personal loans
Personal loans are installment loans that can be used for nearly anything. They typically range from $1,000 to $100,000, with payoff periods of 12 to 84+ months, depending on the lender. Personal loan APRs are usually between 4% and 36%. The credit score requirement for a personal loan is typically between 580 and 700. You can see if you are pre-qualified without hurting your credit score using WalletHub's free pre-qualification tool.
Mortgages
Mortgage loans allow people to buy a house without having enough money to pay for it up front. The borrower can live in the house before they’ve paid the full price for it, but the financial institution that issued the loan owns the title to the home until the mortgage is fully paid off. Mortgages are secured by the home, so if the borrower doesn’t pay off the loan, they may lose the home.
Final Thoughts
Other types of installment loans include student loans, car loans and credit-builder loans. Ultimately, you need to choose an installment loan based on what you can qualify for, your financial standing and what you need the loan for.
If you’re ready to start comparing loan options, visit WalletHub’s best installment loans page.
People also ask
What are the different types of installment loans?
The main types of installment loans are personal loans, mortgages, home equity loans, car loans, student loans and credit-builder loans. Each type of installment loan has different requirements, APRs, fees, payoff periods, and amounts of funding. Some are also used for specific purposes.
Types of Installment Loans
Personal loans are installment loans that can be used for nearly anything. They typically range from $1,000 to $100,000, with payoff periods of 12 to 84+ months,...
read full answerCan you get an installment loan with bad credit?
Yes, you can get an installment loan if you have bad credit. Some lenders, like Avant and LendingPoint, offer personal loans for people with credit scores as low as 580, which is toward the top of the bad credit range (300-639).
A handful of other types of installment loans are available to people with bad credit, too. For example, credit-builder loans and government-funded student loans are available to people with bad credit scores. You could...
read full answerWhat is an installment loan?
It is a loan that comes with a set number of planned payments. The installments are fixed or variable, depending upon the interest rates. For an instance, a mortgage loan can be categorized as an installment loan.
It benefits all the parties involved in a transaction, including the consumer, who can afford big-ticket items; seller can increase sales volume, and the creditor can charge higher interest rate against these loans.
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