The desired total amount is fixed. It should be noted at the outset that consumer credit is also referred to as installment credit, acquisition credit or counter-credit or reimbursement credit. Consumer credit and consumer credit for the purchase of consumer durables and consumer durables. In the installment loan, a certain loan amount is transferred to the borrower on specific terms. The repayment amount can be agreed in several ways.
A consumer credit – what is it?
It should be noted at the outset that consumer credit is also termed installment, acquisition or counterparty credit or reimbursement credit. The consumer loan is a loan for an amount to private individuals, which in turn is to be paid in constant monthly amounts, ie in partial amounts, at a fixed interest. Consumer credit is usually provided by banks under different names such. B. Car loans.
In addition, consumer loans are generally uniform products for private customers and are among the most common loans. In most cases, they are issued without collateral, ie as unsecured loans, although the contract only provides for the assignment of wages and salaries as collateral. It should be noted that the repayment of consumer credit must always be in equal monthly installments, which include both the repayment of the loan and the interest and possibly bank charges.
In addition, interest rates on consumer credit are generally higher than mortgage lending rates but often lower than overdrafts. If certain conditions are met, the house bank also has the option of canceling the consumer loan. The credit institution may therefore terminate the loan only if the borrower is wholly or partially in arrears with at least two consecutive tranches and, with a residual maturity of the installment loan of less than three years, is at least ten per cent, or
It can be concluded that consumer credit is the opportunity for large investments or purchases with little or no equity. Preliminary purchases as well as the distribution and predictability of the costs speak in favor of consumer credit. Early purchases are understood to mean that investments can be made in spite of low own funds or even without own funds.
Expenses for a consumer loan
In addition, the corresponding expenses for a consumer loan are spread evenly over the term of the contract, which protects the solvency. In addition, the level of monthly loan interest can be set in relation to free earnings, ensuring a regular and predictable monthly burden. However, it should be noted that a spot purchase is always cheaper than a consumer credit; because if everyday goods or consumer goods, such as home furniture or electronic devices or travel items, are co-financed by installment purchase or a consumer loan, can quickly pile up very large debts.
Therefore, a distinction is made between short-term financing, medium-term financing and long-term financing. In the case of short-term financing, it should be noted that short-term loans usually offset funding shortages, for example, for a few weeks or a year. Medium-term financing, such as the purchase of medium-term consumer goods, can in turn be provided through consumer credit.
Although the need for credit is greater than for consumer credit, the purchases are a permanent equivalent. It should be noted that consumer credit is essentially a loan that is not linked to an investment or a specific objective.
Consumer credit thus includes all loans that are used for indefinite purposes and are usually not linked to collateral. For the purpose of collateral, a salary statement may be made under the contract, as consumer credit is granted primarily to private individuals. They are also used by the borrower for medium term purchases such as: B. used for furniture, motor vehicles or for travel.
Consumer loans are, as has already been said, granted by financial institutions or by credit institutions and savings banks in installment loan form. In addition, consumer loans are settled in constant tranches with fixed maturity and agreed interest. In addition, consumer credit is usually granted for a maximum of 84 months, but in some cases for one hundred and twenty-one months.
It should also be mentioned that consumer credit is often cheaper than current account credit.