An installment loan is a type of loan that is repaid over time with a set number of scheduled payments. These loans typically have a fixed interest rate and a specific repayment term, which can range from a few months to several years. Common examples of installment loans include personal loans, auto loans, and mortgages. Borrowers receive a lump sum of money upfront and agree to pay it back in regular installments, usually monthly. Each payment includes both principal and interest, making it easier for borrowers to budget their finances. This structured repayment plan helps individuals manage their debt effectively.