What Are Personal Installment Loans: A Complete Overview

Personal installment loans are a popular form of borrowing that provide individuals with a lump sum of money that can be repaid in fixed monthly installments over a predetermined period.
What Are Personal Installment Loans: A Complete Overview
In this article, we will dive into the details of personal installment loans, exploring their benefits, differences from personal loans, and how to apply for them.
In this article

In today’s world, financial stability is a crucial aspect of our lives. Whether it’s for unexpected expenses, home renovations, or pursuing higher education, there are times when we need extra funds to achieve our goals. This is where personal installment loans come into play. 

What is an Installment Loan?

An installment loan is the most common type that allows borrowers to receive a specified sum from a lender and repay it over time in fixed monthly installments. Unlike payday loans or credit card debt, which usually have higher interest rates and shorter repayment terms, installment loans provide borrowers with a structured repayment plan.

Benefits of Installment Loans

Some significant advantages of Insta Loans are listed below:

  1. One of the critical advantages of personal installment loans is their predictability. Borrowers can plan their finances more effectively with a fixed interest rate and a pre-decided repayment schedule. Knowing their monthly installment amounts allows them to budget their expenses and avoid surprises.
  2. Furthermore, installment loans provide borrowers with flexibility. Depending on the lender’s and the borrower’s financial condition and situation, the repayment period can range from a few months to several years. This flexibility allows individuals to choose a repayment term that suits their needs and financial capabilities.
  3. Another benefit is the possibility of borrowing large sums of money compared to other forms of short-term lending. The amount that can be borrowed typically depends on certain factors, such as the borrower’s credit history, income, and overall financial situation. This makes installment loans viable for significant expenses such as medical bills, home improvements, or debt consolidation.

What are Personal Installment Loans?

Personal installment loans, as the name suggests, are installment loans that are specifically designed for personal use. These loans can be used for broader purposes, including covering medical expenses, paying for education, financing a wedding, or taking a much-needed vacation. 

Based on the most recent industry information, there are currently 22.5 million Americans with personal loan debt, totaling $222 billion as of Q4 2022. This is an increase from $210 billion in the previous quarter and $167 billion a year ago, representing a 33% year-over-year rise and a 6% increase from the previous quarter. The versatility of these kinds of loans makes them a popular choice among borrowers needing financial assistance.

Interest Rates

Most personal loans have a fixed interest rate, meaning the interest rate remains unchanged for the entire loan period. However, the Federal Reserve’s rate hikes affect those with variable-rate personal loans. 

Even with a fixed-rate personal loan, federal rate hikes and inflation can still indirectly impact your interest rate. With more Americans taking on personal loan debt, it’s crucial to understand how inflation and Federal rate hikes can affect your loan. The average personal loan interest rate is 11.04%. Before getting a personal loan, calculate how much interest you’ll be paying to avoid defaulting on the loan or accumulating unnecessary debt.

Try Beem’s personal loan feature to get all the information you need on personalized rates and explore loan options ranging from $500 to $100,000, without impacting your credit score!

Personal Installment Loans vs. Personal Loans

While personal installment loans and personal loans are used interchangeably, there is a fine line that creates the difference between the two. Personal loans are a broader category encompassing various borrowing forms, including personal installment loans. Personal loans can also include payday loans, lines of credit, and credit card debt. On the other hand, a personal installment loan refers to loans repaid in regular installments over a predetermined period. 

How to Apply for A Personal Installment Loan

Applying for a personal installment loan is typically a straightforward process. Here are the general steps involved:

  1. Research Lenders: Start by researching reputable lenders that offer such loans. Compare their interest rates, repayment terms, and customer reviews to find the best and perfect fit for your needs.
  2. Gather Documentation: Lenders usually require specific documentation to assess your eligibility for a loan. This may include proof of income, identification documents, and bank statements. Make sure to re-collect and prepare all the necessary paperwork before proceeding with the application.
  3. Fill out the Application: Complete the loan application form provided by the lender. This form will require you to provide and fill in your personal details information, employment details, and the requested loan amount.
  4. Wait for Approval: Once you submit your application, the lender will review and check the information provided and determine your eligibility for the loan. This process may require a few business days.
  5. Receive Funds: If your loan application gets approved, you will receive the funds in your designated bank account. The time it takes to transfer funds may vary depending on the lender.


Personal installment loans offer a convenient and flexible way for individuals to access funds for various unique needs. With fixed interest rates, structured repayment schedules, and the ability to borrow large sums, these loans provide borrowers with the essential financial assistance they need while allowing them to manage their finances more effectively. Suppose you are considering a personal installment loan. In that case, it is necessary and essential to find different lenders, compare terms and conditions, and ensure you can comfortably repay the loan according to the agreed-upon schedule. By making informed decisions, such loans can be a valuable and essential tool for achieving your goals and improving your financial well-being. Beem can help you find, compare options and choose the best personal loan to meet your needs.


1. Can I Prepay or Pay off a Personal Installment Loan Early?

You can usually prepay or pay off a personal installment loan early. However, it’s essential to review the terms and conditions of your loan agreement, as some lenders may charge prepayment penalties or fees. By paying off the loan early, you may save on interest costs.

2. Can I Get a Personal Installment Loan With Bad Credit?

It may be more challenging to qualify for a personal installment loan with bad credit, but it is not impossible. Some lenders specialize in providing loans to individuals with less-than-perfect credit. However, remember that loans for borrowers with poor credit may come with higher interest rates or stricter terms.

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!



Picture of Raman Gujral

Raman Gujral

An achievement-oriented professional, Raman has 10+ years of experience in B2B SaaS and B2C products across Fintech, Telecom, Digital Media, Social Media and Logistics domains. Defining and communicating product vision and strategy, product roadmap development, product positioning, and data analysis, he is also an expert in health insurance and personal loans content.


This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

Personal Loans in Charleston
Personal loans, also known as installment loans, offer a convenient way to borrow money without putting up collateral. Whether you need funds to cover medical bills, home repairs, or other expenses, personal loans can be paid back in manageable monthly installments tailored to your income and credit history. Here's what else you need to know about them.
Is It Hard To Get A Debt Consolidation Loan
Personal Loans in Raleigh
Raleigh individuals have various options for a personal loan. However, what are its features, and how will they benefit you? We'll discuss each of these points in detail.
Personal Loans in Denver
Personal loans in Denver are designed to provide immediate funds to individuals that can be used for different purposes. Denver provides numerous lending options, and choosing the best one for each best fit is essential. Here's what you need to know.
Personal Loans in Sacramento
One can secure personal loans in Sacramento for needs such as debt consolidation, home improvements, vehicle purchases, educational expenses, or medical bills. Gear up to read more about this.
Personal Loans in Baton Rouge
Consider getting personal loans in Baton Rouge from a bank or credit union if you need the money for debt consolidation, home renovations, financing a car or travel, paying for schooling or medical costs. Lenders here consider debt-to-income ratio, credit score, and employment history of the borrowers before issuing loans.
How Long Does it Take to Get a Personal Loan
How Long Does it Take to Get a Personal Loan?
Getting a personal loan can be significantly helpful in unexpected financial circumstances, including consolidating debt or financing a home renovation. However, the time it takes to approve the loan can vary from lender to lender. Here's what you need to know!

Get up to $1,000 for emergencies

Send money to anyone in the US

Ger personalized financial insights

Monitor and grow credit score

Save up to 40% on car insurance

Get up to $1,000 for loss of income

Insure up to $1 Million

Coming Soon

File federal and state taxes at low cost

Quick estimate of your tax returns

Get up to $1,000 for emergencies

Send money to anyone in the US

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: