Installment Loans: Compare Lenders, Costs, and Alternatives
An installment loan gives you a lump sum repaid in monthly payments over a set term, usually the same amount each month, differing from revolving credit which lets you borrow repeatedly up to a limit. Choose it to save money overall with a lower rate, or to lower your monthly payment by extending the term, which may increase total cost.
This guide explains how installment loans work, what they cost once fees are included, how lenders compare on their published terms, and which alternatives fit different situations.
Installment loans vs. revolving credit
An installment loan is a closed‑end loan where you receive all the money upfront and usually repay it in equal payments over a fixed period; the rate can be fixed or adjustable24, so check which one an offer uses24. Revolving credit, such as a credit card, lets you borrow up to a limit repeatedly and make variable minimum payments25. The table below compares the two on the criteria that matter most for a borrowing decision.
| Feature | Installment Loan | Revolving Credit (Credit Card) |
|---|---|---|
| Payment structure | Fixed equal payments over a set term | Minimum payments vary with balance |
| Interest rate | Fixed or adjustable | Set by the card’s terms |
| Borrowing method | Lump sum disbursed once | Revolving line up to a credit limit |
| Typical use | Large purchases, debt consolidation, unexpected expenses | Everyday spending, short‑term financing |
| Collateral | May be secured or unsecured | Almost always unsecured |
Payment structure
- Installment Loan
- Fixed equal payments over a set term
- Revolving Credit (Credit Card)
- Minimum payments vary with balance
Interest rate
- Installment Loan
- Fixed or adjustable
- Revolving Credit (Credit Card)
- Set by the card’s terms
Borrowing method
- Installment Loan
- Lump sum disbursed once
- Revolving Credit (Credit Card)
- Revolving line up to a credit limit
Typical use
- Installment Loan
- Large purchases, debt consolidation, unexpected expenses
- Revolving Credit (Credit Card)
- Everyday spending, short‑term financing
Collateral
- Installment Loan
- May be secured or unsecured
- Revolving Credit (Credit Card)
- Almost always unsecured
Published lender terms at a glance
Ranges across the 13 providers we track, from their official pages and last checked 2026-11-02. These are published ranges, not offers; your own rate, amount and fee depend on your application. Our personal loans comparison page shows every provider side by side with its conditions.
Navy Federal and OneMain Financial and Upgrade publish one range across secured and unsecured offers, so the terms for an unsecured loan alone may differ.
| Term | Across 13 providers |
|---|---|
| Published APR | 5.96% to 35.99% |
| Loan amount | $250 to $100,000 |
| Longest term | Up to 84 months |
| Origination fee | 0% to 12% |
Published APR
- Across 13 providers
- 5.96% to 35.99%
Loan amount
- Across 13 providers
- $250 to $100,000
Longest term
- Across 13 providers
- Up to 84 months
Origination fee
- Across 13 providers
- 0% to 12%
Main types of installment loans
Installment loans come in several forms. Unsecured personal loans require no collateral and are offered by banks, credit unions, and online lenders11. Secured personal loans use an asset such as a car or savings account as collateral, which can lower the rate but puts the asset at risk if you default253. Auto loans and mortgages are specialized installment loans for vehicles and homes. Student loans finance education. This article focuses on unsecured and secured personal installment loans because they are the most common for general borrowing.
What to compare across lenders
When shopping for a personal installment loan, compare these five factors. APR ranges vary widely: Happen Bank 5.96%–35.99%1, Discover 6.99%–24.99%2, Upgrade 7.74%–35.99%3, Best Egg 6.99%–35.99%5. Loan amounts range from $1,000 (Happen Bank, Upgrade13) to $100,000 (Wells Fargo20), though Wells Fargo lends only to applicants who have been its customers for at least 12 months20. Maximum terms extend to 84 months at several lenders12320. Origination fees range from 0% (Discover, Citi, Navy Federal, Wells Fargo2181920) Administration fee up to 9.99% or more (Upgrade 1.85%–9.99%4, Best Egg 0.99%–9.99%5, Avant Administration fee up to 9.99%21). Funding can be as fast as 24 hours (Happen Bank1) or 1–3 business days (Best Egg5). Your actual rate and fee depend on your credit, income, and the lender’s underwriting; some products fall outside these typical ranges.
Eligibility: credit score, income, and options for fair or bad credit
| Factor | Typical Guideline | What It Means for You |
|---|---|---|
| Minimum credit score | Generally 580 or higher | Scores in the 700s qualify for the best rates. |
| Debt‑to‑income ratio | Preferred below 36% of gross monthly income | Many lenders approve up to 50% DTI, but a higher ratio may raise your rate. |
| Minimum income | Varies by lender; Discover requires $25,000, LendingPoint $35,000 | Some lenders have no stated minimum but still verify income. |
| Bad‑credit options | Rates can reach 36% or higher | Payday loans carry APRs of 400%+ — avoid them. |
Minimum credit score
- Typical Guideline
- Generally 580 or higher
- What It Means for You
- Scores in the 700s qualify for the best rates.
Debt‑to‑income ratio
- Typical Guideline
- Preferred below 36% of gross monthly income
- What It Means for You
- Many lenders approve up to 50% DTI, but a higher ratio may raise your rate.
Minimum income
- Typical Guideline
- Varies by lender; Discover requires $25,000, LendingPoint $35,000
- What It Means for You
- Some lenders have no stated minimum but still verify income.
Bad‑credit options
- Typical Guideline
- Rates can reach 36% or higher
- What It Means for You
- Payday loans carry APRs of 400%+ — avoid them.
Cosigner and joint application options
Not all lenders allow cosigners or joint applicants. Happen Bank permits joint co‑borrowers but not cosigners71. Discover allows neither8. Upgrade and Prosper accept joint applications316. Achieve allows a co‑borrower with a rate discount17. Citi does not permit co‑applicants18. Navy Federal lends up to $50,000 to individuals19; amounts above that need a qualified co‑applicant19. LendingPoint does not offer joint applications28. If you need a cosigner to qualify, confirm the lender’s policy before applying.
Step‑by‑step application and funding process
Follow these steps to apply for an installment loan and receive funds.
| Step | Action |
|---|---|
| 1 | Check your credit reports and calculate your DTI (monthly debt payments ÷ gross monthly income). |
| 2 | Prequalify with several lenders using soft‑pull tools — this does not affect your credit score. |
| 3 | Compare offers using APR, which includes interest plus fees. |
| 4 | Submit a formal application with required documents (pay stubs, bank statements, ID). |
| 5 | Review the final loan agreement; note the origination fee, which is deducted from proceeds. |
| 6 | Accept the offer; funds are typically deposited within 1–3 business days. |
| 7 | Set up autopay to help avoid missed payments, and keep enough in the account to cover each payment; some lenders offer a rate discount for autopay. |
1
- Action
- Check your credit reports and calculate your DTI (monthly debt payments ÷ gross monthly income).
2
- Action
- Prequalify with several lenders using soft‑pull tools — this does not affect your credit score.
3
- Action
- Compare offers using APR, which includes interest plus fees.
4
- Action
- Submit a formal application with required documents (pay stubs, bank statements, ID).
5
- Action
- Review the final loan agreement; note the origination fee, which is deducted from proceeds.
6
- Action
- Accept the offer; funds are typically deposited within 1–3 business days.
7
- Action
- Set up autopay to help avoid missed payments, and keep enough in the account to cover each payment; some lenders offer a rate discount for autopay.
Repayment basics: due dates, early payoff, and late payments
Use this checklist to stay on track with your installment loan.
| Item | Details |
|---|---|
| Due date | Fixed monthly payment on the same date each month. |
| Early payoff | Most lenders charge no prepayment penalty. |
| Grace period | Some lenders offer a grace period (e.g., Happen Bank 15 days) before a late fee applies. |
| Late fees | May be charged after the grace period; amounts vary by lender and state. |
| If you can't pay | Contact your lender immediately to discuss deferment, forbearance, or a payment plan. |
| Credit impact | On‑time payments help your score; late payments hurt it significantly. |
Due date
- Details
- Fixed monthly payment on the same date each month.
Early payoff
- Details
- Most lenders charge no prepayment penalty.
Grace period
- Details
- Some lenders offer a grace period (e.g., Happen Bank 15 days) before a late fee applies.
Late fees
- Details
- May be charged after the grace period; amounts vary by lender and state.
If you can't pay
- Details
- Contact your lender immediately to discuss deferment, forbearance, or a payment plan.
Credit impact
- Details
- On‑time payments help your score; late payments hurt it significantly.
Cost breakdown: APR, origination fees, and total interest
The APR reflects the yearly cost of the loan including interest and fees12. An origination fee is subtracted from the loan amount before you receive the money1025. For example, a $20,000 loan with a 5% fee gives you $19,000; a 9.99% fee leaves $18,002. Total interest depends on the APR and term. A $20,000 loan at 12% APR for 24 months costs $941 per month and $2,595 total interest; at 20% APR for 48 months it costs $609 per month and $9,213 total interest. A longer term lowers the monthly payment but increases total cost6. Some products fall outside these illustrative ranges.
These hypothetical examples assume fixed monthly payments and no fees, so the APR acts as the interest rate here. They are not offers. Your own APR, fees and payment may differ.
| Loan amount | APR | Term | Monthly payment | Total paid | Total interest |
|---|---|---|---|---|---|
| $20,000 | 12% | 24 months | $941 | $22,595 | $2,595 |
| $20,000 | 12% | 48 months | $527 | $25,280 | $5,280 |
| $20,000 | 20% | 24 months | $1,018 | $24,430 | $4,430 |
| $20,000 | 20% | 48 months | $609 | $29,213 | $9,213 |
| $20,000 | 30% | 48 months | $720 | $34,566 | $14,566 |
| $40,000 | 12% | 48 months | $1,053 | $50,561 | $10,561 |
$20,000
- APR
- 12%
- Term
- 24 months
- Monthly payment
- $941
- Total paid
- $22,595
- Total interest
- $2,595
$20,000
- APR
- 12%
- Term
- 48 months
- Monthly payment
- $527
- Total paid
- $25,280
- Total interest
- $5,280
$20,000
- APR
- 20%
- Term
- 24 months
- Monthly payment
- $1,018
- Total paid
- $24,430
- Total interest
- $4,430
$20,000
- APR
- 20%
- Term
- 48 months
- Monthly payment
- $609
- Total paid
- $29,213
- Total interest
- $9,213
$20,000
- APR
- 30%
- Term
- 48 months
- Monthly payment
- $720
- Total paid
- $34,566
- Total interest
- $14,566
$40,000
- APR
- 12%
- Term
- 48 months
- Monthly payment
- $1,053
- Total paid
- $50,561
- Total interest
- $10,561
What happens if you cannot repay
Missing payments triggers a series of consequences. The lender will report late payments to credit bureaus, damaging your credit scores2411. If the account goes unpaid, it may be sent to a collection agency2423. The lender can sue to collect the debt23. A charged‑off account appears on your credit report23. For a secured loan, the lender can repossess the collateral2325. Contact your lender at the first sign of trouble to explore hardship options24. If you are consolidating debt, keep paying your old accounts until each payoff is confirmed.
Realistic alternatives by situation
Consider these alternatives before taking an installment loan.
| Situation | Alternative | Key Point |
|---|---|---|
| Necessary bill (emergency) | Nonprofit credit counseling | Can advise on budgeting and payment plans. |
| Necessary bill (emergency) | Negotiate with creditor | Creditors may lower payments, waive fees, or change due dates. |
| Existing high‑interest debt | Debt management plan | A nonprofit credit counselor can explain whether a plan fits your debts. |
| Existing high‑interest debt | Balance transfer card | Promotional 0% APR ends, then rate may rise; transfer fee applies. |
| Credit card balances | Debt consolidation loan | Only helps if you also reduce spending or increase income. |
| Optional expense | Save instead of borrowing | Avoids interest and fees entirely. |
| Any situation | Avoid payday loans | APRs often 400%+. |
| Any situation | Avoid advance‑fee loan scams | Legitimate lenders never guarantee approval for an upfront fee. |
| Homeowner with equity | Home equity loan or HELOC | Risk of foreclosure if you default; closing costs can be thousands. |
Necessary bill (emergency)
- Alternative
- Nonprofit credit counseling
- Key Point
- Can advise on budgeting and payment plans.
Necessary bill (emergency)
- Alternative
- Negotiate with creditor
- Key Point
- Creditors may lower payments, waive fees, or change due dates.
Existing high‑interest debt
- Alternative
- Debt management plan
- Key Point
- A nonprofit credit counselor can explain whether a plan fits your debts.
Existing high‑interest debt
- Alternative
- Balance transfer card
- Key Point
- Promotional 0% APR ends, then rate may rise; transfer fee applies.
Credit card balances
- Alternative
- Debt consolidation loan
- Key Point
- Only helps if you also reduce spending or increase income.
Optional expense
- Alternative
- Save instead of borrowing
- Key Point
- Avoids interest and fees entirely.
Any situation
- Alternative
- Avoid payday loans
- Key Point
- APRs often 400%+.
Any situation
- Alternative
- Avoid advance‑fee loan scams
- Key Point
- Legitimate lenders never guarantee approval for an upfront fee.
Homeowner with equity
- Alternative
- Home equity loan or HELOC
- Key Point
- Risk of foreclosure if you default; closing costs can be thousands.
Frequently asked questions
What is the difference between an installment loan and a payday loan?
An installment loan is repaid in fixed monthly payments over months or years, while a payday loan is a short‑term, high‑cost loan due on your next payday with APRs often exceeding 400%. Compare the APR of any offer before you borrow.
Can I get an installment loan with a credit score below 580?
Some online lenders specialize in bad‑credit borrowers and may approve scores below 580, but rates can be at the high end of the 36% range or higher. You may also consider a secured loan using a vehicle or savings as collateral, which can be easier to qualify for. Always compare APRs and fees before accepting.
How does an origination fee affect the amount I actually receive?
The origination fee is deducted from the loan principal before the funds are sent to you. For example, a $20,000 loan with a 5% fee delivers $19,000 to your account.
What should I do if I lose my job and can't make my loan payment?
Contact your lender immediately to discuss hardship options such as deferment, forbearance, or a modified payment plan. Do not simply stop paying — missed payments damage your credit and can lead to collections or a lawsuit. If you have a secured loan, the lender may repossess the collateral.
Are there installment loans with no origination fee?
Yes, several lenders charge no origination fee, including Discover, Citi, Navy Federal, and Wells Fargo. Always compare the total cost using APR.
Sources and verification
32 sources
Supporting sources checked by automated review.
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- Personal loans Retrieved November 2, 2026
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- Best Eggbestegg.com · 2 pages
- Personal loans Retrieved November 3, 2026
- Debt consolidation loan Retrieved November 3, 2026
- CFPBconsumerfinance.gov · 3 pages
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- What is a personal installment loan Retrieved November 2, 2026
- Experianexperian.com · 6 pages
- What credit score is needed for a personal loan Retrieved November 1, 2026
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- How to boost odds of personal loan approval Retrieved November 1, 2026
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- FTCconsumer.ftc.gov
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- Prosperprosper.com
- Personal loans Retrieved November 3, 2026
- Achieveachieve.com
- Personal loans Retrieved November 3, 2026
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- Personal loans Retrieved November 3, 2026
- Navy Federalnavyfederal.org
- Personal loans Retrieved November 3, 2026
- Wells Fargowellsfargo.com · 2 pages
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- Avantavant.com
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- FDICfdic.gov
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- Personal loans Retrieved November 2, 2026
RateNavigate Research Desk uses automated editorial tools; no human expert review is claimed. General educational information, not a personalized loan offer or financial advice.