Surely consumer loans are not unknown to you and you have heard of them once. For example, when you go to large stores and need some capital to make a purchase. This is the case of the loans that IKEA or Carrefour offers to its clients. The consumer loan must always be linked to the purchase or contracting of a service.
Characteristics of consumer loans
Consumer loans serve to finance purchases. These loans allow financing in 3, 6 or even 12 months. As it is a type of credit associated with consumption, it is necessary to know the solvency of the future client in order to grant it. As a general rule, a series of conditions are required for customers to apply for a consumer loan. The most common are usually the following:
- Demonstrate your financial solvency. In other words, having sufficient capacity to return the borrowed capital in the time established.
- Be a member of your club. For example, if you want to finance the purchase of a kitchen, you will need to be a member of the stores.
- Hire a credit card.
Although consumer loans are offered through stores, the truth is that it is an agreement between the client and a specific bank. These loans work as follows: you go to a store to buy a product and they offer you an alternative way of financing through which to make the purchase.
This purchase is made through a loan from a bank. That is, the bank advances the money to the store and you will have to return it within the established deadlines.
What are the main characteristics of consumer loans?
As a general rule, the main characteristics of these loans are as follows:
- Capital is to be used to make the purchase of goods. Be it furniture, a computer, a car, a television, etc.
- They are not usually of a very high amount, unlike what happens with mortgages.
- The financial institution through which the loan is made must check the financial solvency of the client. To do this, a payroll, an affidavit of your assets or an inventory of assets is usually used.
- The interests are somewhat high but their concession is immediate.
- The consumer is protected by the Law regarding the behavior of the lender and the information he provides about the loan.
How are consumer loans regulated?
Consumer loans are regulated by Law 16/2011, of June 24, on consumer credit contracts. You can review it through the following link.
The Infra Bank understands these loans as one more category of personal loans. That is, those bank products through which the client receives an amount (the loan capital) that he will have to return together with the corresponding interest in the quotas established by contract.
The return of this capital is guaranteed with the debtor’s present and future assets and not with the home, as is the case with mortgages.
The Law also protects the client to exercise his right of ineffectiveness of the credit agreement at the moment in which the supplier breaches it.