Consumer credit – what is it?
Consumer credit refers to short-term credit that is designed to finance daily consumer goods or services at a rapid rate. Usually such acquisitions can be thought of as: car purchase, vacations, home remodeling and home appliances and furniture. A special feature of consumer credit is that the customer does not have to tell the lender the reason for his or her financing needs.
Available consumer credit
At its most typical, consumer credit is an unsecured loan granted by various banks and financial institutions. The Consumer Loans column also includes various overdrafts and credit card credits where the customer has access to a credit line up to a specified credit line. Another type of consumer credit is the installment contract for large purchases. With this payment option, ownership of the product will not be transferred to the buyer until the final payment has been made.
When a consumer loan is an unsecured credit, its interest costs are often higher than traditional bank loans . When obtaining a consumer credit, obtaining the loan is primarily influenced by the financial position of the borrower. Especially when applying for larger loan amounts, the client is required to receive regular monthly salary or pension income.
There are many different types of consumer credit providers and their interest rates and terms vary widely. Consumer credit is provided by banks and financial institutions, credit card companies, insurance companies, online shops and express brokerage firms. Consumer credit is typically a few hundred or a few thousand. However, up to USD 50,000 can now be obtained for unsecured consumer credit. Usually, consumer loans are perceived to be quick to repay, but nowadays it is possible to get repayments for up to 15 years.
What is the cost of the credit?
As already noted, there are major fluctuations in the prices of unsecured consumer loans. The cost of a consumer credit consists of interest and other costs . Other costs are usually the opening fee for opening the credit and the monthly fee for the monthly payment amount. The nominal interest rate on consumer loans is usually between 6 and 30%. The opening fee is typically between 0 and 350 dollars and is usually related to the amount of the loan. The monthly invoicing fee is usually between 0 and 10 dollars.
The only real comparable value is the annual percentage rate of charge on consumer credit . The annual percentage rate of charge represents the total cost of the loan, ie the annual percentage rate of charge, which is the rate of interest and other costs. Lenders must state the actual annual interest rate on the loan at the time of the loan offer, as well as the loan service website. The interest rate formation depends on the lender and also individually on the client. The actual annual interest rates for loans applied for through us range from 4.5% to 50.5%.
Here you can see how important it is to compare and compete with lenders and lenders. There is a great risk that you will get a high interest rate loan when you purchase a loan from the free market. You can proceed to fill out our free loan application here.
Consumer Credit Law Changes
Since 2009, consumer credit has been banned at. 23-07 . Of course, credit decisions on consumer loans can be made, but the customer will only be able to pay the credit during the day.
In 2010, consumer credit was granted only to companies registered in the register maintained by the Regional Authority . Access to this register is subject to good credit.
In 2013, the Act defining the interest rate cap on consumer loans came into force. By law, for loans under $ 2000, the interest rate may not exceed 50% plus the reference rate .