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.
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.Of course, the value of the assets secured by collateralized loans also affects the interest rate of the loan – the more valuable the property, the lower the interest rate and vice versa. However,
However, the benefit of unsecured credit is that it can just be obtained without collateral or guarantors. Many borrowers, and especially young people, may not have any assets or guarantors at all, which will make it much more difficult to obtain many other loans. While consumer credit can easily finance your daily expenses or sudden cash needs, borrowing should never be a thoughtless decision. The loan must always be repaid, with any interest, and the longer the term, the higher the cost of borrowing.
Consumer credit can also be drawn down as a one-time loan or as a continuous flexible loan. A one-time loan is a fixed loan amount that is granted and withdrawn in one installment at a time. After the one-off credit has been withdrawn, repayment begins in monthly installments. For example, in a $ 5,000 one-time consumer credit, you get the full amount of credit once in your account and repay the loan to your bank or finance company in fixed monthly installments or until the loan is fully repaid. A consumer credit can always be reduced prematurely at no additional cost.
In flexible loans, you can extend credit in installments up to your credit line. For example, in a $ 3,000 flexible loan, you can take out a loan of $ 1,000, for example, and you have the option to withdraw $ 2,000 in full or smaller installments in the future. When the credit is repaid, the same amount is released for re-draw. The process works the same as using a credit card. Are you now wondering if a credit card or consumer credit is cheaper? In any case, a consumer credit comparison is always worthwhile, because if you compare loans, you will find the cheapest consumer credit or travel credit online and get the best and most appropriate rates and terms. Compare Consumer Loans Now!
Unsecured consumer credit
Unsecured consumer loans can be conveniently applied for online or for example at a bank branch. However, compare the loans before applying to make sure you find the cheapest credit for you.
The application process is simple, but the conditions and requirements of each lender are slightly different, so you should familiarize yourself with them before applying for a loan. Here is our consumer credit comparison.
Applying for a consumer credit
When applying for consumer loans, it is worth paying attention to interest rates other than credit. In addition to interest, the cost of credit consists of any opening and service charges. You can easily see and compare current costs using the APR. You can conveniently compare the current APRs for different consumer loans and find the cheapest loan from our comparison.
You can easily apply for unsecured consumer loans online. Most credit providers require the applicant to have good credit information, Finnish residence, telephone number and bank account, as well as a steady income. Your salary and other details also affect how much you can get a loan. Regular income can be checked, for example, in a bank statement or pay slips. Before applying for a loan, it is a good idea to check that your finances are in a pattern that you can definitely repay the loan in full. So, it’s a good idea to make sure that you are able to pay your monthly installment now and in the future. Changes to your repayment plans are usually chargeable, so it would be cheaper to agree on a repayment plan that you can definitely commit to.Credit can easily be obtained from some providers.