Economics
Consumer Loan
A consumer loan is a type of loan extended to individuals for personal, family, or household purposes. These loans are typically used to finance large purchases such as a car, home improvements, or education. Consumer loans can be obtained from banks, credit unions, or online lenders, and they are repaid over a specified period of time with interest.
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5 Key excerpts on "Consumer Loan"
eBook - PDF- Guogang Wang, Gang Zeng, Xuan Xiaoying, Guogang Wang, Gang Zeng, Xuan Xiaoying(Authors)
- 2017(Publication Date)
- Palgrave Macmillan(Publisher)
Among them, Consumer Loans refers to paying monetary loans and exempting deposit guarantees for consumers, except for housing loans. 4 Z. GANG AND L. GUANGZI The main participating institutions include consumer finance companies, credit card companies, and banks. 1.1.2 Definition in Domestic Theoretical Research and Practice Up to now, domestic research on consumer finance has not yet formed an independent system and its concept has no uniform definition. Scholars have put forward corresponding descriptions from different angles, such as service, product, feature, and so on. Liao Li (2010) believes that con- sumer finance refers to financial products and financial services, including Consumer Loans provided by financial institutions to consumers; Xi Shi (2010) believes that consumer finance is a modern financial services mode that provides all levels of consumers with Consumer Loans. Yang Shenggang (1999) believes that consumer finance involves financial transactions that provide services for individual consumers. Other than corporate finance, the object of consumer finance service is the natural person, not the enter- prise legal person. Feng Jinhui (2010) believes that consumer finance refers to financial services provided to meet consumer demand for resi- dents’ final goods and services. To realize utility maximization, residential consumers may borrow against future savings, and consumer finance is bred in this demand. Based on summarizing and comparing consumer finance theory, Wang Jiang (2011) and others believe that as far as research is concerned, the category of consumer finance (CF) or family finance (FF) is comprehensive and clear. Furthermore, they maintain, it contains the main content of personal finance (PF). But consumer credit (CC) is only one part of the category of personal or family finance, and as far as theoretical research is concerned, the scope is relatively narrow.
eBook - PDFWiley Pathways Personal Finance
Managing Your Money and Building Wealth
- Vickie L. Bajtelsmit, Linda G. Rastelli(Authors)
- 2012(Publication Date)
- Wiley(Publisher)
Department of Education contributes some of the funds used to make these loans. In addition to their other benefits, student loans generally allow borrowers to defer loan payments under certain circumstances. Loan payments can be tem- porarily deferred for up to three years for economic hardship, postsecondary study (at least half-time), unemployment, or service in the military or the Peace Corps. Perkins loans have the added advantage of being forgiven in whole or in part if the borrower dies or is disabled or if the borrower takes permanent employment Source: U.S. Department of Education. 142 USING Consumer LoanS 6.3 Sources of Consumer Loans Most financial institutions offer one or more types of Consumer Loans. Figure 6-1 summarizes the loan types that various lenders offer. Many Web sites, such as www.lendingtree.com and www.bankrate.com, offer information and rates on Consumer Loans. For automobile loan rates, try http://finance.yahoo.com/loan. 6.3.1 Depository Institutions Depository institutions, such as banks, savings and loans, and credit unions, are financial institutions that obtain funds from deposits into checking and savings accounts. These institutions offer the widest variety of Consumer Loans and, on average, the most favorable interest rates. Types of Consumer Depository Consumer and Brokerage Cash-value Retirement Pawn Credit Products Institutions Sales Finance Firms Life Insurance Plans Shops Companies Policies First mortgage ✘ Home equity loan ✘ ✘ Automobile loan ✘ ✘ Credit card ✘ ✘ Debit card ✘ Student loan ✘ Unsecured personal loan ✘ ✘ Secured personal loan ✘ ✘ ✘ ✘ ✘ ✘ Figure 6–1 Sources for various types of consumer credit. 1. Define home equity. 2. List three types of Consumer Loans. 3. Name two types of student loans. S E L F - C H E C K in certain professions (e.g., math and science teachers in inner-city schools, spe- cial education teachers, law enforcement, nursing).
eBook - PDFIntroduction to Personal Finance
Beginning Your Financial Journey
- John E. Grable, Lance Palmer(Authors)
- 2022(Publication Date)
- Wiley(Publisher)
6-1 Loans and Housing Decisions Nearly everyone celebrates life’s milestones, such as going to college, buying a new car or truck, and purchasing a home. Right now, completing college is probably the milestone you’re hoping to reach next. Obtaining a degree is not only a fantastic way to increase your human capital, it signals to current and future employers that your skills and abilities should be valued in the marketplace. Unfortunately, paying for college can be expensive. This chapter provides an overview of the primary way—other than using cash, debit cards, or credit cards—that people pay for col- lege and other consumer needs: borrowing money. You’ll learn ways to evaluate consumer and educational loans, avoid paying excess fees and interest rates, and identify the appropriate role of personal loans in your life. In this chapter, we’ll talk about different types of debt, generally from the worst debt first and the most consumer-friendly debt last. This chapter also provides details on other types of loans. As you continue moving forward on your lifetime financial journey, it’s likely that buying a vehicle and a home will become import- ant financial goals. This chapter was written to help you make these goals a reality. You’ll learn about the advantages and disadvantages associated with renting, leasing, and buying cars, as well as the strategies to use when renting or buying a home. CHAPTER 6 sturti/E+/Getty Images LEARNING OBJECTIVES Once you have finished reading and working through the material in this chapter, you will be able to: 6.1 Identify high-cost Consumer Loans and how to avoid them. 6.2 Explain the characteristics of a personal loan. 6.3 Discuss the sources of financial aid and loans available to students. 6.4 Determine how to best plan and finance a college education. 6.5 Develop a vehicle-acquisition strategy that uses an auto loan or lease. 6.6 Know the basics of renting a home or an apartment.
eBook - PDF- Robert E. Lawless(Author)
- 2010(Publication Date)
- Greenwood(Publisher)
Other times, dealers are trying to move inventory, and consumers may be able to receive very favorable terms. Consumer product loans are usually three to seven years in term depend- ing on the underlying collateral. If a borrower defaults and misses his pay- ments, the car, boat, or other product will be repossessed by the company that provided the loan. The collateral will be sold, and any shortfall between the lender’s loan amount (including back interest that is often computed using a higher default interest rate) and the sales proceeds will be an obligation of the borrower. In addition, the borrower’s credit report will be damaged. The interest paid on consumer product loans is not tax deductible unless the product is being used for business purposes. In addition, these loans often carry high interest rates when compared to other financing sources such as home equity loans, which will be discussed later in the chapter. When buy- ing the underlying products, customers can often become excited and more focused on having the car, boat, or other item than on the specific financing terms. Many consumer product loans are a source of Bad Debt. Sometimes retailers will offer special fi nancing terms such as 0 per- cent interest or no payments for a certain period of time. Usually retailers look at the total selling price of the product and the fi nancing terms when determining total profitability. In order to convince buyers that they are getting a great deal, retailers may alter the terms between the sales price and the fi nancing. For example, a car dealer may offer 0 percent fi nanc- ing, but charge you a higher price for the car than if you had paid in cash. Alternatively, you may be offered a discounted price if the car is fi nanced at a higher interest rate. When considering consumer product loans, buyers need to determine whether the item being purchased fits within his or her budget.
eBook - PDFIntroduction to Personal Finance
Beginning Your Financial Journey
- John E. Grable, Lance Palmer(Authors)
- 2018(Publication Date)
- Wiley(Publisher)
6-1 Loans and Housing Decisions sturti/E+/Getty Images Nearly everyone celebrates life’s milestones, such as going to college, buying a new car or truck, and purchasing a home. Right now, completing college is probably the milestone you’re hoping to achieve next. Obtaining a degree is not only a fantastic way to increase your human capital, it signals to current and future employers that your skills and abilities should be valued in the marketplace. Unfortunately, paying for college can be expensive. This chapter provides an overview of the primary way—other than using cash, debit cards, or credit cards—that people pay for col- lege and other consumer needs: borrowing money. You’ll learn ways to evaluate consumer and educational loans, avoid paying excess fees and interest rates, and identify the appropriate role of personal loans in your life. In this chapter, we’ll talk about different types of debt, generally from the worst debt first and the most consumer-friendly debt last. This chapter also provides details on other types of loans. As you continue moving forward on your lifetime financial journey, it’s likely that buying a vehicle and a home will become import- ant financial goals. This chapter was written to help you make these goals a reality. You’ll learn about the advantages and disadvantages associated with renting, leasing, and buying cars, as well as the strategies to use when renting or buying a home. LEARNING OBJECTIVES Once you have finished reading and working through the material in this chapter, you will be able to: 6.1 Identify high-cost Consumer Loans and how to avoid them. 6.2 Explain the characteristics of a personal loan. 6.3 Discuss the sources of financial aid and loans available to students. 6.4 Develop a vehicle-acquisition strategy that uses an auto loan or lease. 6.5 Know the basics of renting a home or an apartment. 6.6 Describe the necessary considerations and benefits associated with purchasing and owning a home. CHAPTER 6
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