An instalment loan is any loan that comes in one fixed amount that you refund plus interest and fees in regular 6. Personal loans, student loans and car loans are typically instalment loans. However, most loans that lenders refer to as an instalment loan are a kind of short-term loan — like payday loan.
These instalment loans come in greater amounts and longer terms than its payday loan cousins, though they’re usually smaller than your average personal loan. They can also come with higher rates than personal loans. You can typically borrow up to $5,000 and take six months to five years to pay it off.
Like payday loans, some instalment loans are designed to attract borrowers with bad credit. That’s because they aren’t as heavily regulated as payday loans and permit lenders to avoid state and federal laws. Watch out for these: They can come with highly harsh terms.