Learn what installment loans are, how they work, and how to get approved in the USA, UK, and Canada in 2025. Discover the best options, interest rates, and eligibility tips for borrowers with all credit types.
When unexpected expenses arise, many people turn to installment loans as a flexible borrowing solution. Unlike payday loans or credit cards, installment loans allow borrowers to repay a fixed amount over time, making budgeting easier.
In 2025, installment loans are widely available in the USA, UK, and Canada, including options for those with limited or poor credit. Understanding how these loans work and how to qualify can help you make informed financial decisions.
What Is an Installment Loan?
An installment loan is a type of loan that you repay in regular, fixed payments (installments) over a set period. The loan includes:
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Principal: The amount you borrow
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Interest: The cost of borrowing
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Fees: Origination or service fees, if applicable
Common types of installment loans include:
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Personal loans for general purposes
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Auto loans for vehicle purchases
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Secured loans backed by collateral (e.g., savings or property)
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Unsecured loans based on creditworthiness
Benefits of installment loans:
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Predictable monthly payments
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Longer repayment terms than payday loans
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Can help build or improve credit if paid on time
How Installment Loans Work
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Application: Submit an online or in-person application with your personal and financial details.
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Approval: Lenders evaluate your credit score, income, debt-to-income ratio, and repayment ability.
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Funding: Loan funds are deposited into your bank account or sent directly to a creditor.
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Repayment: Make fixed monthly payments until the loan is fully repaid.
Installment loans differ from revolving credit (like credit cards), where you can borrow repeatedly and interest accrues on a changing balance.
Installment Loans in the USA (2025)
In the USA, installment loans are offered by banks, credit unions, and online lenders, including options for borrowers with poor credit.
Popular Installment Loan Lenders
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Upstart
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Loan Amount: $1,000–$75,000
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APR: 6.7%–35.99%
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Why It’s Good: Uses alternative data such as employment and education, not just credit score.
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Avant
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Loan Amount: $2,000–$35,000
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APR: 9.95%–35.99%
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Why It’s Good: Quick online approval and flexible repayment options for fair-to-bad credit.
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LendingPoint
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Loan Amount: $2,000–$30,000
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APR: 7.99%–35.99%
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Why It’s Good: Considers your financial situation beyond credit score.
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OneMain Financial
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Loan Amount: $1,500–$20,000
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APR: 18%–35.99%
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Why It’s Good: Offers both secured and unsecured loans with branch support.
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Credit Union Loans
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Often provide lower APRs and flexible terms for local members.
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Example: Payday Alternative Loans (PALs) with APR capped at 28% regulated by the NCUA.
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Approval Tips for US Borrowers:
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Keep debt-to-income ratio low
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Provide proof of stable income
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Consider a co-signer to improve approval chances
Installment Loans in the UK (2025)
UK installment loans are regulated by the Financial Conduct Authority (FCA). They are available through banks, credit unions, and specialist online lenders.
Popular UK Options
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Zopa Bank
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Loan Amount: £1,000–£25,000
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APR: 9.9%–34.9%
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Why It’s Good: Quick online approval with fair interest rates.
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Amigo Loans (Guarantor Loan)
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Loan Amount: £1,000–£10,000
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APR: 39.9%–49.9%
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Why It’s Good: Approved based on guarantor credit rather than borrower’s credit.
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Credit Union Loans
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APR: 12%–42%
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Why It’s Good: Lower fees, community-focused lending.
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TSB and NatWest Personal Loans
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Flexible repayment terms, competitive rates for borrowers with improving or fair credit.
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Approval Tips for UK Borrowers:
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Join a local credit union for better chances
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Check eligibility criteria before applying
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Compare multiple lenders to find the lowest APR
Installment Loans in Canada (2025)
Canadian lenders provide installment loans through banks, credit unions, and online lenders. Provincial regulations ensure fair treatment and clear disclosure of loan costs.
Popular Canadian Options
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Fairstone
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Loan Amount: $500–$60,000
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APR: 19.99%–39.99%
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Why It’s Good: Offers secured and unsecured loans for borrowers with poor credit.
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easyfinancial
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Loan Amount: $500–$100,000
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APR: Up to 46.96%
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Why It’s Good: Direct creditor payment options and flexible repayment.
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Spring Financial
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Loan Amount: $500–$35,000
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APR: Up to 35%
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Why It’s Good: “Credit builder” options for borrowers with low credit scores.
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Credit Union Loans
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Provide competitive rates and personalized service for local members.
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Approval Tips for Canadian Borrowers:
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Provide proof of income and employment
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Maintain a low debt-to-income ratio
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Avoid unlicensed online lenders with “no credit check” claims
Benefits of Installment Loans
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Predictable monthly payments
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Can improve credit score with timely repayment
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Flexible loan amounts and terms
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Better budgeting compared to revolving credit
Risks of Installment Loans
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Higher total interest if repayment term is long
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Fees for late or missed payments
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Risk of overborrowing if financial habits don’t change
Alternatives to Installment Loans
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Credit-builder loans through credit unions or banks
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Balance transfer credit cards with 0% introductory APR
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Debt management programs via nonprofit organizations
Conclusion
Installment loans in 2025 provide a flexible and structured way to borrow in the USA, UK, and Canada. They are suitable for borrowers with a wide range of credit scores and can help with debt consolidation, emergency expenses, or major purchases.
Before applying, compare lenders, understand the total cost, and ensure you can comfortably make monthly payments. A well-chosen installment loan can help you manage debt responsibly and improve your financial health.