What is the difference between an installment debt and a revolving debt?
An installment debt (i.e. auto loan, personal loan) is one that has a fixed payment, fixed interest rate and a scheduled maturity date. A revolving debt (i.e. credit card, home equity line of credit) has no set payment and usually has a variable rate. This type of debt is also known as an open-ended account, where the balance you pay back becomes available credit again, with a preset limit and payments that are calculated as a percentage of the unpaid balance.