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  4. What are installment loans?
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  2. FAQs
  3. General
  4. What are installment loans?

What are installment loans?

A payday loan alternative paid back in affordble weekly or monthly instalments:

👍 Short-term loan with flexible repayments: makes sure the repayments are manageable with a repayment term that suits you.

👍 Spread the cost with manageable instalments: one payment can be hard to manage, so spread the cost of the loan with weekly or monthly repayments.

👍 Payday alternative: an installment loan is split into affordable amounts over typically 3 – 12 months, with a payday loan, you are usually expected to repay the full loan and interest in one lump sum.

Borrow £100-£1,500 with an installment loan over 3-12 months, our lenders also have loans available repayable over periods up to 60-months.

Full definition of an installment loan further down the page.

Representative APR: 49.7% (variable)

Rates from 43.1% APR to 1,333% APR – Minimum Loan Length is 3 months – Maximum Loan Length is 60 months.  Representative Example: £1,200 borrowed for up to 75 days. Total amount repayable is: £1506. Interest charged is 0.34% per day, amounting to £306, annual interest rate of 124% (variable).* Subject to affordability and your credit score.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

All Credit Loans is a trading style of Max Your Finance Limited which is an FCA Licensed Credit Broker and not a lender.

Full Definition of an Installment Loan

  • Definition: A loan repaid over time with a set number of scheduled payments.
  • Principal: The initial amount of money borrowed.
  • Interest: The cost for borrowing money, typically expressed as an annual percentage rate (APR).
  • Term: The duration over which the loan will be repaid.
  • Monthly Payments: Borrowers repay the loan in regular instalments, usually monthly. This covers both the principal and interest.
  • Fixed vs. Variable Rates: Interest rates can be fixed (unchanging) or variable (may change over the duration of the loan).
  • Use Cases: Common examples in the UK include mortgages, car loans, personal loans, and student loans.
  • Credit Impact: Properly managing and repaying an installment loan can boost a borrower’s credit rating. Late or missed payments can negatively impact it.
  • Early Repayment: Some installment loans might permit borrowers to repay the loan earlier than scheduled, though there may be fees or charges for doing so.

More info on installment loans here.


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