What Exactly Is an Installment Loan?

Student loans are considered installment loans.Most loans fall under two main categories—installment loans and revolving lines of credit. When researching student loans, you will often read that they are considered as installment loans. Here’s what you need to know about them and how they work.

How Installment Loans Work

With installment loans, the borrower borrows a specific amount of money from a lender and agrees to pay back the loan with interest in a series of monthly payments, starting from a specific date.

Before signing up for the loan, both parties, the lender and borrower, reach an agreement regarding the loan amount, the length of the loan, the rate of interest, the date that the borrower must start making the payments, and the penalties for late-payments and non-payments.

This is exactly what happens when you take a student loan. When you apply for a student loan, whether federal or private, you have to agree to pay it back with interest over a specific period of time. This is usually a few months after your graduation day. At the time of taking the loan itself, you will know how much you will have to pay every month and for how long.

Use College Raptor’s new Student Loan Finder to discover personalized private student loans. Compare lenders and interest rates to find the ideal student loan option for you.

 

Lender Rates (APR) Eligibility
Citizens logo.
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
Undergraduate and Graduate
VISIT CITIZENS
Sallie Mae logo.
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
4.63% - 17.99% Variable
3.49% - 17.99% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
Undergraduate and Graduate
VISIT ASCENT
3.70% - 8.75% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
Undergraduate and Graduate
VISIT EARNEST
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
Undergraduate and Graduate
VISIT ELFI
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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