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An installment loan is a loan product
that is repaid over time with a set number
of scheduled payments. The term of loan
may be as little as a few months and as
long as 30 years. A mortgage, for example,
may be considered a type of installment
loan.
The term is most strongly associated
with traditional consumer loans, originated
and serviced locally, and repaid over
time by regular payments of principal
and interest. These installment loans
are generally considered to be safe and
affordable alternatives to payday and
title loans, and to open ended credit
such as credit cards. Recently lenders
in the cash advance industry have been
developing these type of loan products
for consumers.
There is a large demand for installment
loan products for consumers. The longer
payback period and lower interest rates
enable consumers to payback the loan on
time. Installment loans or credit loans
offer more flexibility without the rise
of a default or failure to pay based upon
insufficient funds when a typical short
term loan *14-30 days in most cases.
A Credit loan is the provision of resources
such as granting a loan by one party to
another party where that second party
does not reimburse the first party immediately,
thereby generating a debt, and instead
arranges either to repay or return those
resources or materials of equal value
or larger value at a later date in time.
Credit is in turn dependent on the reputation
or creditworthiness of the entity which
takes responsibility for the funds borrowed.
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