Loans play a big role in today’s society. In very few cases it is possible to make larger purchases with a cash payment. One of these loans is a consumer loan. This loan is aimed at private customers. It is also known as consumer loan, consumer loan or acquisition loan. Small credit is also a common term for such a loan.
Credit for consumption
A consumer loan is an installment loan that is intended to enable the borrower to fulfill various consumer wishes. Whether a new vehicle, new technology or new furniture is irrelevant. It is also possible to finance a vacation trip with a consumer loan. The consumer loan is granted in the amount of the purchase for which the loan is taken out. The term is fixed for some consumer loans, but for some it can also be chosen freely.
Since the loans are geared towards a purchase, the consumer loans are not only offered by banks, but also by mail order, goods, furniture and car dealerships. It applies that the goods become the property of the buyer only after the loan has been paid off. With this loan, it is possible for consumers to make larger purchases even in difficult financial times.
Who can get a consumer loan?
Since the loan is aimed at consumers and is granted in a manageable amount, everyone can get a consumer loan. Small loans are not tied to the usual creditworthiness criteria and can therefore also be used by someone who, for example, cannot have a regular income from a fixed employment contract. The lender takes little risk with these loans because in most cases there is a material equivalent that remains in the lender’s possession until the borrower has paid his loan in full. It can be assumed that every third household in Germany uses a consumer loan.
Comparison and caution in dealing with consumer loans is required
As with all loan offers, however, the various offers for a consumer loan should also be checked. The amount of interest can differ significantly between the individual offers. With smaller sums in particular, you can get away better if you borrow the money from friends or family, as a loan is too expensive here.
Since the creditworthiness of a consumer loan is not checked, these loans require a high degree of financial responsibility. Too many of these consumer loans can put financially disadvantaged families in dire straits. Before the loans are used, you should take a critical look at your financial situation.
A consumer loan does not necessarily have to finance a new car or expensive furniture. It is not for nothing that consumer loans are also called small loans. With loan amounts even below 1000 USD, short financial bottlenecks can be bridged and, for example, a new mobile phone or a coffee machine can be purchased. Consumer credit is a welcome solution, especially for everyday devices that break unexpectedly and for which new money from the household budget was not currently planned.