In terms of various cash loans on the internet, among the fast loans offered by non-bank lenders is consumer credit to individuals. Each of these loan types has its own differences. Find out what’s special about consumer credit in an article by Good Finance.
What is a Consumer Credit?
The concept of “consumer credit” has long been known, but in the past it was mostly associated with the supply of bank credit. However, this type of loan has been offered by non-bank lenders for some time now. This gives customers a much wider choice, as well as the process of issuing loans to non-bank lenders is usually faster and the consumer credit is credited to the customer’s account soon. Consumer credit for individuals is an opportunity to:
- borrowing money of up to several thousand dollars – unlike traditional short-term quick loans of up to several hundred dollars, the amounts available for consumer credit are relatively higher;
- Repay in phases – you can repay the consumer loan in installments by paying a monthly fee. You have the choice of how much you will pay per month and when you will repay the loan. The average loan maturity offered by non-bank lenders is up to 24 months, in some cases 60 months;
- there is no need to pledge anything – unlike leasing and mortgages, consumer credit is much easier – you can spend it for any of your needs without having to pledge the thing you bought.
The opportunity to make a larger purchase and return the loan more easily are the main reasons why consumer credit is increasingly used by individuals.
Who is using such a loan?
Nowadays, everyone strives for convenience, with everything you need at your fingertips. That is why consumer credit is used to easily borrow the necessary financial resources:
- home repairs (for example, a consumer loan can be used to hire a craftsman to pull a new wiring harness);
- the purchase of new household appliances (a popular heading for consumer credit on the Internet, since not everyone has the patience to defer several months of salary to buy, for example, a new washing machine, especially when the need is acute);
- for improving periodic health (for example, a weekly sanatorium may sound a bit old-fashioned, but often it is exactly what it takes to regain your vitality, so this kind of consumer credit will definitely be used effectively);
- car purchase (if for some reason, conventional leasing does not seem like a good option, consumer credit is an alternative option to purchase such a car);
- tuition or course fees (this is usually a valuable investment, as such courses will in most cases improve a person’s qualifications and help them earn money in the future, which will also make it easier to repay a consumer loan).
Unlike some banks, online consumer loans are easier to apply for, and non-bank lenders process their requests relatively quickly, without any formalities. The answer is often given within minutes, and the consumer credit will be available to you the same day (if you meet the requirements). When borrowing with non-bank lenders, you also do not need to specify the purpose for which you will use the money. However, Good Finance points out that this does not mean that consumer credit is easily accessible to everyone on the Internet.
Conditions for Consumer Credit
A consumer loan is a serious loan, just like any loan, so there are also conditions for obtaining it, and the applicant’s ability to pay is assessed. Although the requirements of different lenders vary slightly, the main prerequisites are quite similar:
- A consumer credit is granted to an individual when he or she is at least 20 years old and is debt-free (meaning that a good credit history is a prerequisite for granting a consumer credit).
- The maximum amount available is considered individually depending on the borrower’s financial situation. Usually the first payment is a little smaller, and if the consumer credit is repaid within the specified terms, it is possible to apply for a larger amount by borrowing again.
What to consider if you want to borrow?
Once you have decided which consumer credit or any of the other quick loans are the best solution for your situation, the next step is to carefully consider the offers of all lenders to balance them with your options.
If it is clear to you that consumer credit is the right solution, then start gathering information about the options available. Before deciding whether a particular lender’s consumer credit will be the right one, pay attention to the following details:
- Whether the monthly repayment is right for you – Before you decide on a monthly repayment, carefully calculate whether you will have enough cash to spend on a daily basis after the payment, as a consumer loan, like any loan, will have to be repaid and will definitely have an impact on a common monthly budget;
- whether the total amount of the loan is the lowest possible – when you see an offer to borrow a relatively large amount of money, you often want to take more money on a “case by case” basis than you may need. Therefore, before looking at the offers, plan ahead of time the maximum amount you will borrow;
- what are the extra costs of a loan – when borrowing most of the commission is applied to the loan, so look into it and calculate the total cost of the loan to see exactly how much the consumer loan will cost you;
- What is the Annual Interest Rate – Every loan is subject to an Annual Interest Rate, but it varies from one lenders to another. Therefore, compare them before the application is completed and the consumer credit is obtained;
- what are the chances of not being able to repay on time – there may be unexpected situations in everyone’s life when you miss your payment, so find out the lender’s conditions if you are not able to pay your monthly loan on time – it’s important to think about it in time there are clear steps to take;
- What are the terms of the contract – Before borrowing, carefully read all the terms of the contract to understand your obligations and responsibilities. If you are unsure of a contract, ask your lender! Consumer credit is designed for the convenience and needs of users, so take the time to learn everything you need.
Here you can borrow money from 50 to 1500 dollars and return it within one to 24 months. The consumer credit does not have to be repaid in one installment, so it is more budget friendly.
Any questions? Contact Good Finance customer service specialists, who will be happy to provide you with answers on how to apply for consumer loans online, and will be happy to explain what a consumer loan is, how it differs from other types of loans, and what the differences between lenders are !
Before deciding to borrow money, carefully consider the need for the loan and whether your financial situation will allow you to repay the loan on time without creating a budget gap! Note that a good credit history is an essential prerequisite for continuing to obtain loans or take advantage of the opportunities offered by consumer credit, so treat it responsibly.