What is an Installment Loan from a Direct Lender?
An installment loan allows you to borrow a set amount of money. This type of loan is very common, and contrasts with a revolving credit like a credit card or line of credit. Borrowers must decide how much money they need to borrow before taking out the loan, and they agree to pay the loan over a fixed period of time. Most installment loans require monthly payments and charge variable interest rates.
Types of Installment Loans
Even if you’ve never heard of an installment loan, you’ve likely encountered one at some point in adulthood. Here are some of the most common types of installment loans:
This type of installment loan is the money borrowed to buy a house. Most mortgages are paid in a 15- or 30-year term, with a monthly payment and a fixed interest rate.
If you aren’t paying cash for a car, you’re probably paying for it with an auto loan. This type of loan is usually a shorter term than a mortgage, ranging from 12 months to 8 years. Loans with a longer term usually involve lower monthly payments, but higher interest rates.
Personal loans are a convenient option for those who need emergency funds. Some personal loans are short-term, but others may have a loan term of up to 8 years. Personal loans can be used to pay off medical bills or other unexpected costs. They do not require collateral, but do have higher interest rates than other types of installment loans.
To learn more about installment loans from direct lenders visit LiftCredit.com.