An installment loan is a type of loan where a fixed amount of money is borrowed and repaid over a set period through regular, scheduled payments (installments). Each payment typically includes both principal and interest, with the loan terms, interest rate, and repayment schedule agreed upon upfront.

Installment loans are commonly used for large purchases, such as homes, cars, or education, and provide predictable repayment structures for borrowers. They can be secured (backed by collateral) or unsecured, depending on the lender's requirements and the borrower's credit profile. This loan type is ideal for individuals or businesses seeking structured, long-term financing.