Did you know that many loans you already use are installment loans? The term installment loan is not commonly used, but you probably know them by other names. This type of loan is one in which you decide on the amount you’re going to borrow. While a credit card is a type of revolving credit with a limit, an installment loan amount is decided beforehand. Here are three of the most common installment loans you may already use.
1. Car Loan
If you don’t buy your cars with cash, then you’ve probably had an auto loan. Depending on how much the car is, you apply for a loan to cover the amount of the purchase price and then pay back the installment lender Mississippi monthly. Auto loans can typically be paid back over the course of one to six years, however, the longer the term the more interest you pay.
2. Personal Loan
A personal loan can be used for a variety of purposes. Some of the most common things personal loans are used for are medical bills, home renovations, debt consolidation and vacations. Deciding if a personal loan is worth it comes down to determining how much interest you will pay out over the course of the loan.
3. Mortgage
A mortgage is an installment loan used to purchase a house. Mortgages are repaid over the course of 15-30 years and can have a fixed interest rate that doesn’t change each year or a variable interest rate that can go up or down each year.
As you can see, you’re probably already using an installment loan. They can be beneficial when you need to purchase larger items or take care of emergency expenses, just be sure to determine if the interest you’ll pay makes sense over the course of the loan.