Installment - Financial definition
Concise definition of the term installment
An installment is a fixed amount of money paid at regular intervals as part of a larger sum.
Comprehensive definition of the term installment
In finance, an installment refers to a predetermined portion of a loan, debt, or purchase price that is repaid incrementally over a specified period. This periodic payment structure is commonly utilized in various financial products such as mortgages, auto loans, and installment plans for goods and services. Each installment typically comprises both principal and interest components, with the frequency and amount determined by the terms of the agreement. Installments provide borrowers with manageable repayment schedules while allowing lenders to mitigate risk and earn interest income over time.