Installment loans are loans that are lent to a customer in one go, and then paid back in monthly installments.  You are almost certain to have taken out one of these loans without ever realizing what it was called. In fact, most of the loans you’ll take out in your life fall into this category. The loan is for a fixed amount, and it is paid in installments. While this isn’t a very common term, you see these loans everywhere. When you take out a mortgage on a house, borrow money for a car, or even take out certain types of school loans, you’ll be taking out this type of loan.

Compared with credit cards, these loans are advantageous because the APR is set in advance instead of having a variable interest rate that changes based on your situation as with credit cards.

With this plan, you are able to predict your monthly payment each month and you don’t have to worry about variable interest rates.