What are the different types of consumer credit?

What is affected credit?

What is affected credit?

This is a form of credit that is generally found directly at the point of sale, in order to be able to finance a large expense in several monthly payments. These include the type of credit you can find when you see an offer to pay in 3 installments or 10 installments. Credit allocation involves creating a link between the funds offered by the bank and the good or service purchased. The refusal of the credit contract results in the cancellation of the order form.

Unallocated credit: how does it work?

Unallocated credit: how does it work?

As the name suggests, unrestricted credit, also known as a personal loan, is a sum of money that is not associated with a particular expense. In reality, the personal loan is to be considered as an envelope of money offered to the borrower, which he can use as he wishes.

He does not have to justify the use of the funds nor to provide a quote or invoice, as is the case with an assigned credit. It is a form of credit which brings real freedom to the borrower, because he can have the sums according to his desires but he loses security if the purchase does not succeed!

Personal loans are arguably the clearest and most free form of consumer credit. You know in advance the duration of repayment, the interest rate, and you also know the total cost as well as the possible costs for an early repayment. You have a free hand on your credit, and you can make sure that it fits into your budget perfectly. A loan that adapts to all situations? Not exactly.

The main limitation of the personal loan lies in the non-allocation of sums to a purchase. In the event of a problem at the time of the delivery of a good or the performance of a service, you cannot cancel your credit.

Revolving credit: principle and operation

Revolving credit: principle and operation

Revolving credit is cash made available to the borrower. It is a form of consumer credit close to unrestricted credit, because the borrower can use the funds as he wishes. However, a major difference exists: the cash is replenished as repayments are made, and becomes usable again. This form of credit can therefore be used permanently, as needed but with caution, to avoid the spiral of over-indebtedness.

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