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.
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