Consumer credit
Consumer credit is a type of loan that covers transactions other than those related to real estate. It specifically addresses the cash flow needs of borrowers wishing to finance the purchase of consumer goods.
Therefore, it is not necessarily a secured loan, meaning a loan that is triggered upon the purchase of a product and presentation of its invoice (like a car loan when buying a car). For your information, consumer credit can be used in many circumstances.
A consumer loan is granted by a specialized credit institution or a bank insofar as the borrower is able to meet his monthly payments and therefore repay it.
What are the different types of consumer credit?
Aside from earmarked loans, which require the borrower to justify the use of the funds, there are many other forms of consumer credit. The most common, in addition to earmarked loans, are personal loans and revolving credit, also known as open-end credit, replenishable credit, or permanent credit.
In both cases, the borrower is free to use the amount of their loan as they see fit, according to their project(s) (renewal of furniture or household appliances, purchase of a new vehicle – car, motorcycle… –, financing of home improvement or renovation work, etc.).
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