Installment loans are consumer loans (consumer loans) to private individuals and investment loans to companies or the self-employed. This form of loan is a loan from a financial institution, which can usually be repaid in small installments over a certain period of time. The amounts to be repaid are determined at regular intervals.
The most popular loan form installment loan
The amount, the time of the payments due and the duration of the entire repayment are agreed with the financial institution at the beginning. In order to be able to speak of an installment loan , there must be at least two installments for the repayment of the loan. These loans are consumer loans (consumer loans) to private individuals and investment loans to companies or the self-employed. This type of credit is not only granted by banks, but is also a common form of payment in goods trading.
Car loans or small loans for the purchase of technical equipment are the most popular type of this type of loan and can be used for as little as USD 500.
Amount of installments on credit
The amount of the installments is constant in the most common cases and, in addition to the capital to be repaid, already includes all interest and fees due. Thus, the user of the loan can easily include the regular amounts in the calculation with his available funds.
Payment due date
The installment payments for the repayment of the entire amount are usually agreed monthly. Many banks also have the option, if the customer wishes, to pay a higher amount than the amount due. This means that the loan can be terminated earlier than agreed.
Duration of the loan
The duration of loans is related to the amount of the repayment installments and the total borrowed capital. The higher the rate, the shorter the so-called term of the loan.
Cost of capital
In return, the consumer or the entrepreneur charges interest and fees for the borrowed money. The borrower will be informed of the amount of these credit costs before signing the contract.
Learn more about our Installment loans type, and if it may be the right fit for you.