Banking

Q&A: What are installment credit accounts?

Installment credit accounts are types of loans that usually require a fixed payment each month until the balance is paid down to $0.

Examples:
Mortgage
Auto Loan
Student Loan

Real-life application: Person A has an auto loan that has an initial balance of $15,000, a term of 60 months, an interest rate of 4%, and a monthly payment of $276. If they don’t pay anything beyond the minimum payment each month, they will pay 60 payments of $276.

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