One of the major reasons why most people go for consumer credit is because of its low-interest rate. Consumer credit helps you to spend money on products that you need. For instance, a good example of consumer credit is when you use a credit card. You can use a credit card to pay for either goods or services, then make repayments to the credit card company in the future. Here are more things you need to know about consumer credit.
Types of consumer credit
Consumer credit can be categorized as non-installment credit, installment closed-end credit, and revolving open-end credit. You can access non-installment credit as a secured or unsecured loan from beste forbrukslån.
What is unique about this non-installment credit is that it doesn’t have a specified monthly repayment amount of money. Instead, the full amount of money that you use is due to all at once as a lump sum repayment. In most cases, this credit is usually due in a short-term period, like in a month.
Installment closed-ended helps you to receive a specific amount of credit to buy a few goods. For example, you can secure an installment closed-ended credit to buy a car. Simply put, this credit doesn’t go beyond the amount you use to buy the car. Besides, you are allowed to pay the credit in installments within an agreed time rather than repaying all the loan in one lump sum.
Revolving open-end credit is also offered by a credit card. Here, you can have a certain amount of credit that you can use or not use at your pleasure. But if you use the credit, then you are obliged to pay off a portion of the credit at the end of a specific period, like a month. The credit is still open unless the company offering the credit decides to close your account.
Where to get a consumer credit
Whether you want to get a consumer credit to use for personal things or for your small business, it’s good to check the consumer credit options. As you might be aware, credit is considered as an arrangement where you get cash now and pay for it in the future. Because most people use closed-end credit, it makes sense for you to understand the various forms of this credit.
- Revolving check credit. Most banks offer this open-credit which is a prearranged loan that involves a specific amount you can use by writing a check. You can make repayments in installments within a certain period. But the fees are based on the amount of money you use and the outstanding balance.
- Credit cards. These cards are also known as bank cards and you can get them from financial institutions. They are short-term loans where you borrow up a specific amount and pay back at your convenience as long as you pay the minimum amount that is due. You are also supposed to pay interest and may be liable for other charges, like a late payment charge.
- Debit cards. Banks usually issue these cards and they work like checks. When you are paying for anything, the cost of it is debited electronically from your bank account and transferred to the account of the seller.