The installment loan is the most common form of credit. The repayments are paid back to the bank monthly in the form of installments. The amounts are automatically debited from the borrower’s account, for example.
As the name suggests, an installment loan is a loan that is repaid by the borrower in installments. The installments are repaid at equal intervals, depending on the agreement and contract. Often the repayment of the remaining debt is monthly.
How does an installment loan work?
After the loan has been disbursed by the lender, repayment is started within the repayment period, which is clarified in advance. The borrower now pays the specified sum, similar to rent, on a monthly basis. Interest is also added to this amount. The repayment of the installments then continuously reduces the remaining debt.
