Installment Debt Definition, What Exactly Is Installment Financial Obligation? What Exactly Is Installment Financial Obligation? Installment financial obligation is that loan this is certainly paid back because of the borrower in regular installments. Installment financial obligation is normally paid back in equal monthly obligations that include interest and a percentage of principal. This sort of loan is a loan that is amortized calls for a regular amortization routine become produced by the financial institution detailing payments through the entire loan’s extent.