An installment loan is a common way to borrow money that provides you with an upfront lump sum of money that you can repay over time in a fixed number of equal monthly payments.These monthly payments are sometimes referred to as installments.

Installment loans are a type of closed-end credit, so once you make all the monthly payments as scheduled, your loan balance will be zero and the account will be closed. If you need additional money, you have the option to open a new installment loan.

There are several common types of installment loans including personal loans, auto loans, and mortgages.

Pros and Cons of installment loans

There are pros and cons to installment loans. Here are some of the basic pros and cons of most installment loans:


  • Fixed Interest Rate. Installment loans usually have a fixed interest rate, which means that your rate will never change based on the market.

  • Fixed Monthly Payments. Installment loans are repaid in equal monthly installments, or payments, which make them easier to budget.

  • Affordable rates. The cost of installment loans is usually much lower than those of payday loans, which charge upward of 400 percent.

  • Builds your credit score. Most installment lenders report to credit bureaus. This means that your credit score can go up if you make your monthly payments on time.


  • Potential fees. Some installment loans have fees in addition to the interest charged. These fees are designed to cover the costs associated with making or servicing the loan.

  • Potential high interest. Installment loans may have higher interest rates than some types of credit. Frequently, the rate is based on the borrower’s credit profile.

  • Other Requirements. If a borrower has a higher likelihood of not being able to repay the loan, the lender may require various types of collateral to secure the loan.

Why choose an installment loan from Courtesy Finance?

Courtesy Finance is an installment lender based in Atlanta GA that operates convenient, local branches that allow you to work one-on-one with a real person to find a loan that meets your needs. Our installment loans provide you with money to fund your life.

  • Clear loan terms, fixed rates, and no hidden fees
  • Flexible application process that looks at more than just your credit score
  • Friendly service from local people who understand your situation

The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal, tax or any other advice specific to you the user or anyone else. The companies and individuals referred to in this article are not sponsors of, do not endorse, and are not otherwise affiliated with Courtesy Finance.

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