Consumer credit generally refers to a loan that is to be used for some form of consumption. Credit is often low in value and short in loan maturity, so it usually takes up to a few years to repay.
There are many different types of consumer loans, such as home improvement loans, vacation loans or car loans. There are many different types of credit available on the loan market, each of which you can choose to apply for.
What is Consumer Credit?
To put it bluntly, a loan is defined as a consumer credit if the loan is worth between $ 1,000 and $ 50,000 and is intended to buy a service such as travel or repair, or a product such as a boat or electronics. In addition to credit provided by financing companies and banks, consumer credit also includes installment purchase agreements offered by shops. It is always advisable for the consumer to consider the purpose and need of the credit and his ability to repay before applying. Always compare loans before applying.
Consumer loans in Finland were on the rise in early 2019. Just two years ago, the consumer loan portfolio was € 14.4 billion and the average growth rate was 3.7%, but this figure has already been exceeded in 2019. The growth of the loan portfolio is focused on longer term loans over five years.
Longer loan periods usually mean a higher loan amount, somehow the growth of the consumer loan portfolio in 2016 will be focused on new consumer loans worth several thousand euros. Typically, this kind of credit in Finland is about EUR 15,000.
This page explains the following important things about consumer credit.
- What is Consumer Credit?
- Consumer Credit Online or Consumer Credit Bank?
- How do consumer loans differ?
- Unsecured consumer credit
- Applying for a consumer credit
- Interest rate on consumer credit
- How to Choose the Best Consumer Credit?
- Consumer loan repayment and charges
- Reasons for rejecting your consumer credit application
Consumer Credit Online or Consumer Credit Bank?
When applying for credit, you have more options for applying for a loan. You can think about whether online consumer credit is a good option for you, or whether traditional bank consumer credit would be better. However, competition between banks is fierce, so a comparison is always worthwhile.
Many traditional banks offer different types of credit products, but there are very few differences between them. It is important to keep in mind the following:
- Interest rate on consumer credit
- Other costs of the loan
- Own financial situation and ability to repay
- Apply for consumer credit only if you know you can repay the loan
- Do you want to combine loans? In this case, select the consolidation loan
This site has a handy consumer credit comparison where you can compare and apply for unsecured consumer loans online. In addition, they often have a fast processing time. Compare to see how you can get your consumer credit right away and you will surely find the best option.
How do consumer loans differ?
Consumer loans can be collateralised or unsecured. In an unsecured consumer loan, the loan is obtained without collateral or collateral. Because banks have no pledge on unsecured consumer loans, interest rates on unsecured loans are often higher than interest rates on secured loans. Thus, in unsecured consumer loans, banks or finance companies have nothing to compensate for their own losses if the borrower is unable to repay their loan in full. Therefore, interest rates are slightly higher than in secured consumer loans.
A secured credit is a loan that the borrower has given to a bank or finance company to secure some of their own assets against the loan. For example, housing, a car, a motorcycle, a summer cottage or other eligible property owned by the borrower may be covered. In secured consumer loans, the interest rate on credit is often lower than in unsecured consumer loans.
This is because, in the case of secured loans, the risk of a bank or finance company losing the amount they borrow is reduced because, in the event of a possible insolvency, the borrower, bank or finance company has some sort of pledge of assets to offset any loss.