Installment Loans
vs Personal Loans
Confused by the terminology? A personal loan IS an installment loan — the best kind. Fixed payments. Fixed rate. Builds credit. No collateral. Learn the key differences.
Personal Loan Estimator
Estimate your monthly payment
Total interest: $2043 over 36 months
The Complete Installment Loan Taxonomy — Where Personal Loans Fit
Every loan with a repayment schedule is an installment loan. Here's where personal loans fit in the landscape:
| Loan Type | Secured? | Purpose | Typical APR | Builds Credit |
|---|---|---|---|---|
| Personal loan (installment) | No — unsecured | Any purpose | 5.99%–35.99% | Yes |
| Mortgage (installment) | Yes — your home | Home purchase | 6%–8% | Yes |
| Auto loan (installment) | Yes — your car | Vehicle purchase | 5%–15% | Yes |
| Student loan (installment) | No | Education | 5%–8% federal | Yes |
| Payday loan | No | Short-term cash | 200%–664% | Usually no |
| High-cost installment loan | Sometimes | Any purpose | 60%–200%+ | Sometimes |
Why Personal Installment Loans Are the Best Choice for Most Borrowers
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Unsecured — no collateral risk
Unlike auto loans or mortgages, personal loans require no collateral. Missing a payment damages your credit but cannot cost you your car or home.
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Fixed rate — no surprise increases
Personal loans have fixed APRs that never change. Your monthly payment on day 1 is identical to your payment on month 59.
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Builds credit history
Every on-time payment is reported to all 3 major bureaus (Equifax, Experian, TransUnion) and improves your credit score over time.
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General purpose — any use
Unlike an auto loan (car only) or student loan (education only), a personal loan can fund anything: debt consolidation, medical bills, home repairs, or emergencies.
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Frequently Asked Questions
Meet the Expert
Sarah Chen
“CFP® with 15+ years in consumer lending, debt restructuring, and loan underwriting. Leads PrimeLendings editorial review and ensures all content meets YMYL accuracy standards.”