Grace Enfield, Content Writer
@grace_enfield
The difference between an installment loan and a personal loan is that an installment loan can be any type of loan paid off in regular intervals over time, while a personal loan is just one example of an installment loan. All personal loans are installment loans, as are car loans, mortgages and home equity loans.
Types of Installment Loans
- Personal loans
- Car loans
- Mortgages
- Home equity loans
- Credit-builder loans
- Student loans
To learn more, check out WalletHub’s editors’ picks for the best installment loans and the best personal loans. Then, you can estimate your rates with our free pre-qualification tool.
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Why are installment loans bad?
Some people think installment loans are bad because they only allow you to borrow once, they sometimes require collateral and they often charge fees. Installment loans can also hurt your credit score if the lender does a hard inquiry into your credit history when you apply and if you don't make your monthly payments on time.
Why Some People Think Installment Loans Are Bad
- Installment loans only allow you to borrow one time....
Which is better, a payday loan or an installment loan?
An installment loan is better than a payday loan because installment loans have much lower fees, longer repayment periods, and larger loan amounts, and they can improve your credit score over time. Payday loans are predatory and often have fees equivalent to an APR of 400%+, so they should be avoided.
For your convenience, below is a comparison of payday loans and installment loans.
Payday Loans vs. Installment Loans
| ... | Payday Loans | Installment Loans |
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