Installment loans are loans that are repaid over a defined period of time through a number of set payments. The payments are often made in a cyclical fashion, such as once a month or twice a month.
The most common example of an installment loan is a mortgage loan for a home or residential property. Installment loans generally involve at least two payments and may also involve other terms such as interest rates.
In an installment loan, the lender and the borrower will usually work out the details of the loan in a contract. This will include issues such as the total loan amount, payment dates, penalties for missed payments, interest rates, and other details.
Besides Installment Loans, What Other Types of Loans Are There?
Installment loans are a common type of loan. They allow a borrower to take out a loan of relatively higher amounts while paying back what they can in increments. Other types of loans include:
- Payday Loans (also called cash advances): traditionally, to be repaid upon the person’s next paycheck; often linked to the borrower’s payroll records.
- Title Loans: Loans that are backed (secured) by the borrower’s property, often a vehicle or car.
- Credit Lines: These are open-ended lending situations in which the borrower has access to a certain amount of money lent; often repaid periodically
There are many other types of loans; generally speaking, most loans involve some form of recurring cyclical payments. Terms can also be negotiated individually between the parties.
What Are Some Common Legal Issues Involved with Installment Loans?
Installment loans can often give rise to various legal issues. These may include:
- Loan fraud
- Identity theft (such as when a bogus "lender" uses the borrower’s personal information for personal gain)
- Failure to make the monthly payments
- Breach of loan contract (i.e., raising rates without notice, etc.)
Most legal disputes may be resolved through a monetary damages award for the non-violating party. In some cases, the court may order other remedies, such as an injunction or a revocation of license, depending on the type of violation.
Do I Need to Hire a Lawyer for Help with an Installment Loan?
Installment loans can often be a source of various disputes and legal issues. You may need to hire a finances lawyer in your area if you have any questions or concerns involving an installment loan. Your attorney can provide you with legal advice and representation when it comes to your financial matters. Also, if you need assistance filing a case in court, your lawyer can help you with that and can represent you during the process.