What is a consumer loan?
Strictly speaking, a consumer loan is nothing more than a consumer loan. The word consume comes from the Latin consumere and means something like consume. There are many synonyms for consumer credit on the credit market: Whether installment credit, personal credit, instant credit, consumer credit or general-purpose credit – all denote the same form of credit.
The area of application of consumer credit is just as diverse as its name: you can use consumer credit to buy a new washing machine, treat yourself to a car or finance your long-awaited trip to New York. Consumer credit is usually not tied to a specific purpose, such as a real estate loan or car loan. There are no limits to the uses of consumer credit as long as your household budget, the amount of credit you want and your income match.
This enables a consumer loan
With a consumer loan, you can finance amounts from 1,000 to 50,000 dollars. The terms between 12 and 84 months can be selected as freely as the amount of the desired monthly rate. Also pay attention to good special conditions: More and more loans offer the possibility of special repayments, installment suspensions and flexible adjustments of the rate (increase or decrease).
Apart from that, a consumer loan is unbureaucratic: collateral, for example through an entry in the land register, is usually only required from higher sums of more than 50,000 dollars – such as with building finance. Another advantage of consumer credit: With larger, more expensive purchases, you can use the cash as a cash payer in front of the seller and possibly negotiate discounts. This is not possible for loans that you take out through retail, such as paying in installments for a washing machine, because the money flows directly from the cooperating bank to the seller and does not go through your hands at all.
Pay attention to credit check’s neutral condition request
As soon as you want to receive a concrete offer for a consumer loan, some providers submit a so-called loan request to credit check. At first, this has no negative effects. If this happens more often, credit check interprets this as if you had always sent credit applications directly to the bank and as if they had always been rejected – although that was not the case. After all, with this process you only wanted to find out what conditions you can expect. However, credit check concludes that your credit rating is not good enough and may lower your credit check score. In the case of a so-called inquiry, credit conditions, as described by Dr. If it is used on a small scale, this does not happen and credit check immediately understands what is meant by your request.
Better interest rates: consumer credit as a dedicated loan
In principle, a conventional consumer loan is not tied to a specific purpose. But there are also variants that are linked to a specific purpose. After the loan amount has been paid out, this usually has to be proven to the bank. This is the case, for example, with a car loan: Here, the lending institution would like to find out in which car you have invested the money provided and see a corresponding proof of purchase.
The situation is similar with the modernization loan, which is also known under the names renovation loan, renovation loan or residential loan. This type of loan is aimed exclusively at property owners who have to prove their ownership in writing by means of a land register extract. In contrast, debt protection by entering a land charge is not necessary for the modernization loan.