An Installment Loan is a loan that allows the borrower to repay the loan back in multiple payments. For example, if you get a 2 year loan that requires monthly payments, you have an installment loan. Some loans are single payment loans and are structured differently. Creditors generally prefer offering installment loans because it’s easier for the borrower to repay the debt over time at a determined rate that can be planed for.
One of the main advantages of getting an installment loan is the ability to combine several debts such as credit cards, personal loans and etc. into one monthly or weekly payment. Simplifying the ability to track and manage personal finances and reducing the number of creditors on your credit report (which should help improve your credit score) are the primary advantages of installment loans for debt consolidation.