Installment loan vs personal loan
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Installment loan |
Personal loan |
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Installment loans are personal or commercial loans that borrowers must repay with regularly scheduled payments or installments. |
Personal loans are sometimes called signature loans. |
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For each installment payment, the borrower repays a portion of the principal borrowed and also pays interest on the loan.
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They get this name due to the fact that if you qualify, you can receive the loan with just your signature |
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Examples of installment loans include auto loans, mortgage loans, personal loans, and student loans. |
The loan is unsecured, you don't have to put up any assets or collateral, such as a home or vehicle, to secure financing. |
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The advantages of installment loans include flexible terms and lower interest rates. |
Here are a few common reasons why people take out personal loans: * Debt consolidation * Major medical expenses *Fixed-price home repairs |
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The disadvantages of installment loans include the risk of default and loss of collateral. |
There are also several potential benefits to using a personal loan over other types of financing when you need to borrow money. These include: * Lower interest rates * No collateral necessary * Fixed rates and payments |
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