Credit Cards

Installment loan

An installment loan is a loan in which equal, periodic payments are made for a defined period of time. A typical car loan is an example of an installment loan: You pay the same amount each month, with part going toward interest and part going toward principal, until the loan is paid off. Successfully paying an installment loan is good for your credit score, as credit scoring formulas reward those who show the ability to handle different types of loans.