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A bank’s installment lending portfolio is usually comprised of secured or unsecured small loans, each scheduled to be repaid in equal installments at fixed intervals over a specific period (closed-end loans).
Installment loans are made directly to customers for activities such as buying automobiles, boats, or recreational vehicles. Other installment loans are made indirectly, that is, customers purchase these types of items by accepting loans from thirdparty brokers or dealers. Although automobile leases are not the same as loans, the installment lending industry typically manages leases in the same manner as loans.