A consumer credit is not a special loan form, but a loan that is taken out for the purpose of a consumer purchase or other consumer financing. For example, consumer credits can be taken out to finance a new car, but you can also finance a purchased service with it.
It is not always wise to use a consumer loan for financing a renovation or maintenance of your home. Mortgage loans are recommended for this. You could see a consumer loan as an investment in goods with limited shelf life, while a mortgage loan fits well with a sustainable investment.
Different types of consumer credit
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If you would like to borrow money for a consumer purpose, the personal loan and the revolving credit are usually recommended. However, there are more loan forms that can be used as consumer credit, such as interest credit, personal credit, senior credit, plus credit, savings credit and annuity loan.
The personal loan
The personal loan is undoubtedly at the top of the types of consumer credit. This loan form allows you to borrow money with a lot of certainty and fits well with financing a new car or washing machine. Most one-off purchases can be financed with a personal loan. The term is fixed, as are the monthly charges and the interest rate.
The revolving credit
The revolving loan owes its name to the fact that the loan continues, or can continue. It is not mandatory to immediately take out the entire loan (the credit limit). Instead, you can withdraw money continuously, whenever and for what you want, as long as you do not exceed the credit limit. This loan comes with a variable interest rate and with flexible monthly payments.
Advantages of a consumer credit
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Compared with most mortgage loans, taking out a consumer loan is less time-consuming and time-consuming. After all, you do not have to reimburse additional costs such as the commission and notary fees for taking out a consumer loan.