ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is an Installment Loan? An installment loan refers to both commercial and personal loans that are extended to borrowers and that require regular payments. Each of the regular payments for the loan includes a portion of the principal amount, as well as a portion of the interest on the debt.

Detailed explanation-2: -Installment loans are personal or commercial loans that borrowers must repay with regularly scheduled payments or installments. For each installment payment, the borrower repays a portion of the principal borrowed and also pays interest on the loan.

Detailed explanation-3: -Installment loans-also known as installment credit-are closed-ended credit accounts that you pay back over a set period of time. They may or may not include interest. Read on to learn more about different types of installment loans and how they work.

Detailed explanation-4: -A term loan is a monetary loan that is usually repaid in regular payments over a set period of time. Term loans usually last between one and ten years, but may last as long as 30 years in some cases. A term loan usually involves an unfixed (a. k. a. floating) interest rate that will add additional balance to be repaid.

Detailed explanation-5: -An installment loan is a loan that provides the borrower with a lump sum of money up front, which is to be repaid in installments over the course of an established term. That is why an installment loan may also be called a term loan.