A consumer loan is a type that a bank or another type of lender extends to a person, on an unsecured basis, for personal, household, and other similar purposes. A consumer loan typically has a fixed interest rate, with length terms ranging from 3 to 7 years. Some consumer loans, as in the case of an auto loan, will accept a deposit, which lowers the amount of the loan.
There are many sub-categories of consumer loans including the following: an installment loan which allows a borrower to obtain an item (e.g. a house or a vehicle) and pay for it on a regular basis, with each payment including interest payments and some portion of the principal. Another personal loan category is a time loan, where a borrower may obtain cash for a specified period of time and needs to repaid on a single repayment basis. Here are some of the most important benefits of consumer loans.
One of the most important advantage of obtaining a consumer loan is the convenience it offers to borrowers. When you do not have access to money and you need to fund an expense or a purchase immediately, a consumer loan is often your best bet. A consumer loan provides you with access to the amount you need without having to ask for your friends or family for money. It also means that you can avoid borrowing from predatory lenders who charge unbelievably high rates.
Ease of Access
During an emergency, such as when you need extensive plumbing repairs or if your car requires a new transmission, it is possible that you do not have the cash needed to pay for these readily available. Consumers are quick and easy to apply and get approved for. You can definitely apply for as many consumer loans as you want, and you will not get tied to any of them until you sign the loan agreement. This means that you can shop around and see which loan offers the best rates and deals without having to commit to anything.
No Restrictions on Intended Use
With a consumer loan, you are not limited to using the proceeds of the loan on a specific item or for a specific purpose. Unlike other types of loans that are tied to a particular purpose (e.g. a student loan, a mortgage, a car loan, etc.), a consumer loans provides you with flexibility when it comes to how you use the money. Read here for more info on consumer loans: https://en.wikipedia.org/wiki/Credit.