Buy a new car, buy new computer equipment, redecorate the house… consumer credit is the type of credit that can be adopted for the purchase of these goods mentioned above. On the other hand, it cannot be used for the financing of a real estate purchase, and within the framework of a professional activity.
The basis for properly managing consumer credit is to separate spending. It is as much about not making unnecessary expenses. You should know that banks, financial organizations want more spending from borrowers and thus, they will present all possible credits.
For long-term credit, it is better to analyze past finances, and similarly in the future. Subsequently, forecast the financial situation in fifteen years, since the mortgage may still be in repayment at this time. When there are doubts about the condition in the future, never opt for this kind of credit. However, the savings plan if you have more income, is possible to enjoy a better offer. It is easier to manage consumption credits when anticipating possible cases. In reality, a good borrower is one who can expect the worst possible conditions.
The rates for a consumer credit
2 forms of credit possible for a consumer credit: the classic loan and the revolving credit. When the two allow projects to be carried out, there is always a difference between their repayment methods and their interest rates.
Classic or personal credit is a fixed rate credit, which is often used to carry out major projects (USD 5,000 and more). A fixed rate is an interest rate that does not undergo revision during the loan. Instantly upon subscription, the duration and the amount of the reimbursements are defined.
On the other hand, revolving credit is specially adapted to small purchases. The money you need can be released regularly until the amount borrowed is used up. It is thus possible to withdraw money again in revolving credit (available amount). The interest rate affixed to a revolving credit can be modified. It can change depending on the amount that was used. It can also be revised over the life of the loan.
Categories of consumer credit
The different kinds of consumer credit are:
- Credit allocated for the purchase of a car and for the financing of studies;
- Permanent credit (with a credit card);
- Credit online through the Internet;
- Personal credit with no specific expense;
The advantages of consumer credit
The borrower: by paying only once, it makes it possible to acquire consumer goods.
The bank or the lender: it presents a financial windfall since the interest rates adopted are high compared to market rates.
The economy: consumer credit helps maintain growth by soliciting consumption.
Before finalizing the choice, you should always think about making a comparison in order to find an attractive rate for a cheap consumer credit. Avoid succumbing to overly promising offers and those that offer no booking fees. Accept insurance and it is necessary to compensate for a delay in the payment of monthly payments. Study the debt ratio. Finally, make small gestures in case of late repayment of monthly payments.