What are Installment Loans & How Do They Work? - Boise, Idaho

March 9, 2025
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Finding yourself in a pinch financially is a scary, stressful thing to experience. In today's economy, many of us are struggling to come up with extra funds. But what if something unexpected hits and you have to pay a lump sum upfront?

Here's an example of a situation you might find yourself in:

You rely on your car to get to work, but your transmission is failing. The cost of repairing it is about $2,500 and you don’t have that money upfront or the savings to cover the cost. What do you do?

This is where a short-term installment loan can come in and save the day. Instead of scrambling for cash or using a high-interest credit card, you can get your car repaired immediately and continue working with a manageable and predictable monthly payment that fits your budget.

At Idaho Finance we offer great solutions for exactly these types of emergencies. Let's dive in and talk about what an installment loan is and how exactly they can work for you.

What Is An Installment Loan

An installment loan is a type of loan that you pay back in fixed amounts over a period of time. There are many different types of installment loans, some you might even have currently. Some of the most common are:

Personal installment loans
Auto loans
Mortgages
Student loans
Payday loans
Buy-now, pay-later loans

What makes these types of loans installment loans? These are close-ended, meaning that they are for a set amount of money meant to be paid over a set amount of time. (In contrast, a credit card is an open-ended loan meaning you can borrow more after it's paid off.) Typically they are paid on in regular intervals (i.e. monthly, biweekly, etc) for the same amount.

A great thing about these installments through Idaho Finance is that you aren’t required to keep them open for the full loan timeline; you can pay them off early if the opportunity arises. At Idaho Finance, there isn’t even a fee associated with early payoff! The sooner you pay back your loan, the more money you save on interest.

How Do Installment Loans Work?

How do they work and what does the process look like?

1. The application process: At Idaho Finance, the application process is quick and painless! After a quick credit check, you’ll move forward in your cost-free application. We can even offer low interest rate plans for those who have bad credit.

2. Loan terms: Your loan terms will be given to you for you to review. This will include the duration of the loan, how much your payments will be and how frequent, and what your interest rate will be throughout the life of the loan.

3. Loan disbursement: You receive your lump sum of money (anywhere from $100 - $5,000).

4. Repayment: The rest is up to you. Make your payments in your regular and manageable amounts. Again, you can pay off early if you are able, which will save you in interest in the long run. It feels good to not only pay off debt but to boost your credit score in return! This will make future borrowing needs easier.

Pros & Cons of Installment Loans

Installment loans can be a useful financial tool, offering a structured way to borrow money for planned or unexpected expenses. Whether you are financing a car or car repair or covering medical bills, these loans provide predictable repayment plans that are helpful while living with a budget.

Like any financial product, they come with both pros and cons. Understanding both sides can help you make an informed borrowing decision.

Pros of Installment Loans:

Fixed Monthly Payments - This makes it easy to budget as the payments stay the same.
Lower Interest Rates - Lower rates make them often cheaper than credit cards or payday loans.
Flexible Loan Terms - Choose the repayment periods that fit your goals.
Credit Building Opportunity - Making on-time payments can help improve your credit score.
Larger Loan Amounts - Can fund a range of amounts from $100 - $5,000.

Cons of Installment Loans:

Interest Adds Up - As with any loan, the longer the term, the more you pay in interest over time.
Credit Risk for Missed Payments - While making on-time payments can help your credit score, there is the potential for damage to your credit score if payments are late or missed.

Are Cash Loans and Installment Loans the Same?

Are cash loans and installment loans the same thing? Short answer: No. But here is the deal: a short-term installment loan and a cash loan can sometimes overlap. Here is how they differ:

Feature	Short-term Installment Loans	Cash Loans
Repayment	Fixed monthly payments	Lump sum OR installments
Loan Terms	3-24 months	Days to months
Loan Amounts	$100 - $5,000	Usually smaller, but varies
Interest Rates	Lower than cash loans	Varies, but often high
Best for:	Emergency expenses with structured payback	Immediate cash needs

Is an Installment Loan Right for You?

Installment loans provide a structured and manageable way to borrow money. They offer you fixed payments, predictable terms, and the flexibility to cover unexpected expenses. While the unexpected costs of repairing your car's transmission or even emergent medical bills aren’t ideal, you can be taken care of with a personal installment loan from Idaho Finance.

The key to making an installment loan work in your favor is understanding the terms and making sure they fit within your budget. By making consistent on-time payments, you can not only repay your loan efficiently but also build a positive credit history, which can benefit your financial future.

At Idaho Finance, we are committed to providing reliable and affordable personal installment loans tailored to your needs. We make the application process free and easy and also won’t penalize you for early repayment as we have your best interest in mind. If you are facing an unexpected expense and need help, we have got you covered. Call Idaho Finance in Boise, Idaho at (208) 999-LOAN (5626) to apply today and take control of your financial future.