A loan paid off by the borrower in periodic payments. In general, this is repaid monthly including principal and interest. It is a favored method of consumer funding for big-ticket items like appliances and cars because it benefits all parties. Consumers derive benefits from financing costly items at interest rates that are normally way lower than credit card interest rates. Dealers or sellers gain benefits through increased sales volumes. And the lender benefits by charging bigger rates on installment debt than on other loans.