What are the different types of installment credit?

In some cases, the limit can also go up or down over time. The most common types of installment credit are mortgage loans, auto loans, personal loans and student loans. That said, even some credit cards, which are a form of revolving credit, offer installment plans for certain purchases.

What is an example of an installment loan?

An auto loan is another example of a secured installment loan. You borrow the cost of the vehicle and make monthly payments, plus interest, typically over two to five years. If you miss payments, the lender can repossess your car. » COMPARE: Auto loans vs. personal loans: What’s the difference?

Do installment loans help your credit?

Installment loans can help you achieve some of the most common and sought-after financial goals, like owning a house or car, by allowing you to pay back a purchase over a long period of time. Making installment loan payments on time and paying off the loan as agreed will help your credit.