Definition

Noun: A type of credit or loan where the borrowed amount, plus interest, is repaid through a series of scheduled, equal payments over a fixed period.

Usage

This term is used specifically in the context of personal finance, banking, and consumer lending. It describes the structured nature of the debt repayment.

Examples

• The customer used installment credit to finance the purchase of a new refrigerator.
• Compared to revolving credit, installment credit typically has a fixed repayment schedule.
• Auto loans and personal loans are common forms of installment credit.

Advanced Usage

• Secured vs. Unsecured Installment Credit: Installment credit can be secured by collateral (like a car for an auto loan) or unsecured (like many personal loans).
• Amortization: The structure of installment credit payments is based on an amortization schedule, where early payments cover more interest, and later payments cover more principal.

Variants and Related Words

• Installment Loan: A nearly synonymous term, often used interchangeably with "installment credit."
• Installment Plan: A specific agreement outlining the terms of the installment credit.
• Installment (noun): Refers to one of the individual, periodic payments made to repay the credit (e.g., "The first installment is due in June.").

Synonyms

• Term Loan
• Closed-end Credit

Antonyms

• Revolving Credit (e.g., credit cards, lines of credit)

Noun

1. a loan repaid with interest in equal periodic payments