When a person begins to find out about consumer credit, several questions arise. In this case, let’s look at the four questions with their answers related to this type of loan.
What is a consumer credit?
It is a loan granted by the bank or other financial institution to its client, with the latter’s commitment that he will return it in installments, with additional interest. This type of credit allows you to have a certain amount of money to spend it on what the applicant deems appropriate. To obtain it, it is necessary to demonstrate the ability to pay to be able to pay it off.
How can the customer’s ability to pay be determined?
For this, an exercise is carried out: determine the monthly net income and subtract the fixed expenses from this period (food, services, education, transportation, etc.). Then, estimate a monthly expense for several (clothes, fun, outings, among others) and subtract it, as well as if you have other credits. If the result of this equation is zero or a number close to zero, it means that you do not have the ability to pay.
What law governs consumer credit?
Depending on the country, there are different laws that define these money loan operations in order to determine the interests, rights and obligations of each party. For example, in Law 18,010 of Chile, its first article states that money transactions in the form of credit are those that one of the parties gives money and the other must pay, as arranged, either weekly, monthly or every year.
Who can ask for a consumer credit?
According to this same law, there are no restrictions regarding the granting of credits, either for individuals or entities. However, the Banking Law indicates that each entity has the rights to grant or not, as it deems appropriate. The difference is that this type of credit has fewer requirements than others, such as a mortgage loan, since the amount is less. Interest rates are usually higher, but approval is almost immediate.
The most important thing when applying for a loan is to quote the options offered by the market, in order to choose the best alternative. In Best Bank you can simulate your Consumer Credit for free. Enter your information and start saving