The majority of loans extended to borrowers are installment loans. An installment loan is any loan with a drawn out term that is reimbursed in regular scheduled payments. Each payment, called an installment, carries a portion of the principal amount and the interest.
The five common loan types are personal, mortgage, auto, and student loans. Minute Loan Center offers these easy online installment loans in several states across the US.
In this article, we discuss each loan type, letting you know what each entails. Identify the loan that matches your need, and only take out a loan you can afford to pay.
The Five Common Types of Installment Loans
1. Personal Loans
A personal loan is the loan you get to cover any legitimate personal expense. It has a fixed interest rate, and since it’s unsecured, the loan attracts a higher interest rate than secured installment loans like mortgages. A personal loan term ranges from 12 – 60 months, but some could extend up to 72 months.
Being one of the easy online installment loans, lenders deposit the funds into your account the same day or the next day. You could use the money to pay for emergency expenses like home repairs, unexpected medical expenses, or college tuition. You may also use these types of installment loans for debt consolidation, where you consolidate multiple debt lines with high interests into one lower-interest debt account and pay the one loan monthly. Debt consolidation helps you save money by reducing the interest paid and helps you organize your finances better since you’re only dealing with one loan.
Another way to utilize your personal loan is to pay for large purchases or costly events like weddings, vacations, or renovations. The loan makes the large costs manageable because you can pay off what you owe slowly, over a long period, and without cutting so deep into your monthly budget.
2. Mortgage Loans
Mortgages are among the most commonly sourced types of installment loans. They are easy online installment loans that make homeownership easier by providing a lump sum amount to pay for your home and requiring you to repay the amount within a predetermined period. Most people in America are servicing a mortgage loan, which is why mortgage loans represent over 70% of consumer debt.
The most popular mortgage loans have a 15-year or a 30-year term. The 15-year mortgage has a lower interest and higher installments than the 30-year term, but it allows you to build equity and fully own your home fast. In contrast, the 30-year-term loan has a higher interest rate and lower monthly installments, giving your budget some breathing room.
3. Auto Loans
Another type of installment loans are auto loans, which are loans designed to help with the purchase of a vehicle. They are secured loans and often have fixed interest rates. Although many dealerships provide in-house financing, you could get an auto loan from a bank or other credit lender because they tend to have greater repayment flexibility and lower interest rates.
An auto loan is one of the easy-to-qualify-for online installment loans, especially when buying a new car. You’re asked to pay a down payment or trade-in your current car, and finance the balance with a car loan. From then, you make monthly payments to the lender or the dealership until your auto loan is fully paid.
4. Student Loans
Student loans, just like mortgage loans, are also quite common in America; about 43 million Americans, roughly 13% of the population, hold student loans. These types of installment loans are financed for a long time, sometimes even into the borrower’s retirement. So, it helps to find lower interest rates to save on the costs so you pay your student loan faster.
The federal government offers student loans through FAFSA to students eligible to attend a US university or college. But you may get a better deal with a private student loan from an online lender or a financial institution.
5. Buy Now, Pay Later Loans
Buy now, pay later loans are used to fund large purchases that individuals would not afford otherwise. They typically have a 6-24 month term. With a positive credit history, it’s easy to qualify for these online installment loans, even more so than a regular personal loan.
Apply For An Installment Loan Today
Easy online Installment loans are loans taken in lump sums and paid back in smaller preset scheduled payments. They are useful for enabling borrowers to make large purchases they could not afford otherwise.
To access an affordable installment loan, contact Minute Loan Center. We offer several types of installment loans for all kinds of borrowers, regardless of their credit history. Sign up here to set up your account and get started. Apply for a loan!
Kevin brings over 15 years of experience in marketing, with a specialized expertise in growing online businesses. As the Director of Marketing at a leading FINtech company, he employs innovative strategies to enhance brand visibility and customer engagement. Kevin’s passion lies at the intersection of technology and finance, where he pioneers solutions that not only meet but exceed consumer expectations. His commitment to leveraging his expertise ensures impactful results and the building of lasting relationships in the digital landscape.
