What is an Installment Loan?
Introduction: A loan is a sum of money or an object that has been borrowed from a person known as the lender. The person who avails this loan is called as the debtor. There are various types of loans which are categorized based on the type of repayment that the debtor promises to. While repaying the debts, the lender will levy an amount of amount of money as interest. Large companies and banks have a heavy rate of interest that is very difficult for the person to pay back. This rate of interest may also be subject to change causing difficulty for the person. This is where the prepaid loan comes in handy. This loan is an effective replacement for other type of credits or loans like the credit cards, payday loans and title loans.

Prepayment Loan - A Definition and Explanation: An Installment mortgage is the one that is, an amount of money borrowed from someone, repaid in small fixed amounts, in a regular way. This reduces the burden of high fluctuating interest rates and premium payment. A very good example for an installment loan is the home mortgages. These are loans that are taken for buying of homes and are usually a large amount, with an agreement signed with the creditor ensuring that the loan would be paid back in small intervals and a fixed rate of interest over a period of time.

The Canadian Regulations also classify the educational loans taken by student as a type of installment loan and this is controlled by the federal authorities of Canada. The big advantage of Installment Loans is that the lender need not be a large corporation or industry. It might even be individuals who lend the money.

Uses Of Installment Loans: The Installment Loans are part and package of marketing industry. The Canadian markets have their own terms for Retainer Lending and they provide this for the customers who are not in possession of a credit card or any other mean of immediate payment. The product being bought by the customer may be bought as an object with extended monthly payments. The rate of interest for this is known as the EMI.

This is followed by most of the large stores having provisions and products that are costly and is difficult for an ordinary user to pay for them at once in a single payment. Some products like flat screen television, computers are the most common appliances that are sold in this way. As mentioned above the student loans also come under this type of loan. The Canada Students Program is designed to ensure the integrity of the student credit program. The Installment Loans don't require a credit report and any formal compliance. Hence this has been a boon to many in Canada in this period of time.

Conclusion: The Installment Credits are in a way very much useful in handling situations when payday loans and open credit loans are no longer an option. And getting loans from a bank might take a long duration and lots of credit checking, which are eliminated in the Installment Loans.

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