Which is an example of Closed-End Credit?

Closed-end credit is a type of loan where you borrow a specific amount of money and pay it back in a set period. Once you pay back the loan, the account is closed.

Usually, you’ll typically get the entire amount upfront, and make monthly payments until you’ve paid it off. People typically get this kind of loan when they’re making a big purchase, but can’t pay in full right away.

Some typical examples of closed-end credit are mortgages, personal loans, or auto loans. 

Closed-end credit can be an excellent way to get the money you need quickly with a fixed interest rate (typically). They can be great for building credit too, since you have to make monthly payments. Things to remember with closed-end credit are that the funds are fixed (meaning your loan can’t be increased later) and that missing a payment can hurt your credit. 

Need to build credit?

Kikoff is a credit-building app that can help you establish a positive payment history through their Credit Builder account. Plans start at $5 a month, and even have an Autopay feature, so you can build credit in the background. Kikoff has no credit check, hidden fees, or interest. Sign up in minutes and start building credit faster.