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An installment loan is technically any loan that comes in one fixed amount that you repay, plus interest and fees, in regular payments. Personal loans, student loans and car loans are considered installment loans.
However, the term installment loan typically refers to a type of short-term loan — similar to a payday loan. But unlike a payday loan, installment loans allow you to borrow more over a longer period of time. You may be able to borrow up to $5,000 with six or more months to pay it off.
LEARN MORE: Read our guide to how installment loans work
Use our monthly payment calculator to estimate how much you’ll pay in interest.
|Loan terms (in years)|
You can generally use an installment loan for any legitimate purpose, including:
However, it’s best to use installment loans as a last result because of the high cost of borrowing.
Although most lenders offer similar options, these points should help guide you to the right loan.
While every lender has its own requirements, you’ll need to meet these basic criteria to qualify:
Most online installment loan providers are willing to work with borrowers with less-than-perfect credit, but you’ll likely end up with higher rates.
LEARN MORE: Compare installment loans for bad credit
Installment loans are a quick and convenient option — but are often costly.
Installment loans are an expensive option and should be used as a last resort. Consider these alternatives before you borrow.
You can browse our top alternatives to short-term loans for more ways to avoid high-interest debt.
How you repay your installment loan largely depends on your lender. Generally, you need to make monthly, semi-monthly or weekly repayments until the loan is completely paid off.
If your lender allows you to repay your loan ahead of time without charging a prepayment penalty, you could stand to save on interest. That is, as long as your loan repayments all go toward paying off interest and the amount you borrow. It’s not uncommon for installment loan providers to charge interest-only repayments in the beginning, meaning that you can’t save on interest by paying it off early.
Choose your state of residence to see a selection of online installment lenders.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Answers to common questions about installment loans.
You can, though most lenders require you to at least have a green card to qualify. Check out our guide to getting a loan as a nonresident to find lenders and learn about what you need to do.
Technically, you can. However, since installment loans typically come with high interest rates, it might not be the fix you need.
If you’re struggling to repay several short-term loans and your credit is shot, consider signing up for credit counseling. Credit counseling agencies can work with you to find a solution to your specific situation and offer advice on how to stay out of debt.
You can find a government-approved credit counseling agency near you by visiting the Department of Justice’s website.
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