- Examples of consumer credit
- Types of consumer credit
- Online Credit
The bank then offers several types of loans, tailored to the client. Either the customer can easily pay off because he has a big salary, and will repay a loan it quickly to pay less interest, but with high monthly payments (interest is what the bank takes as money to pay the “service” rendered), or he will pay slowly, with lower monthly payments, but much longer.
The consumer credit is regulated by the Act. Companies that advertise on credit must meet a number of instructions, to clarify and simplify the understanding of future credit applicant. There will always be the imprint that nobody reads, but since the law of Christine Lagarde to reform the market in consumer credit, interest rates are clearly displayed, and the terms are standardized. It is now easier to compare offers from credit companies between them, and choose the most advantageous.
Examples of consumer credit
- Case 1: Raymond earns 2000 euros a month, he wants to buy a car on credit, which costs 10,000 euros. It will take a credit, because he needs a car to go to work and he can not wait to save money.
Raymond took a credit of 22 months: every month, it pays 500 euros to the bank. In the end of 22 months, it has paid 11 000 euros: the credit cost him 1000 euros.
- Case 2: Rene earns 1000 euros a month, he wants to buy a car on credit, which costs 10,000 euros as well. It will therefore take a loan, but it can not pay 500 euros a month, it has not the means.
René took a credit of 50 months: monthly, it will pay 250 euros to the bank. This is less than Raymond, but it will pay longer normal. In the end of 50 months, it will have paid a total of 12 500 euros. The credit cost him 2500 euros, far more than our friend Raymond.
Moral: the poor could buy a car on credit, because he needed it, but ultimately, it loses from Raymond, as the credit has been even more expensive, as it gains half …
The consumer credit is reserved for people who want to buy something they can not pay all of a sudden cash.
Types of consumer credit
Many credits are available : auto loan to buy a car, holiday credit for finally able to rest a hard year of work, credit the work to renovate his home … credit adapted to every kind of consumer need.
Of course there are many types of consumer loans, according to what you buy and how we have chosen to pay :
- Assigned the loan: the bank lend us money to buy a specific object, a car for example.
- Personal loan: the bank lend us money, without specific expense. The customer then spend the money where it will. This type of loan requires strong guarantees from the borrower, such as pay slips or a stable income. Revolving credit, the old “revolving
- credit” or money reserve: very often associated with credit cards, the credit is the easiest to obtain. Very few formalities, many department stores offer credit cards associated with a revolving credit to facilitate the purchase of their products. This is one of the main dangers of credit, you can quickly spend beyond reason. If you are careful, it’s a convenience that can be very handy, but you have to manage its budget to perfection.
Before the advent of the Internet, credit applications were sometimes very long. We had to move to the agency, request a file, submit pay stubs, and so on, until you can get credit as desired, one that sometimes we can pay a big unexpected expense.
Then came the credit agencies that have begun to extend credit over the phone, such as Cofidis, who initiated this innovation, in 1982. It was a radical change in approach, a simplification of the process. He had become, overnight, much easier to obtain credit. What has not helped the family debt, which, instead of taking a credit wisely, did so to buy more than they could handle …
Then came the Minitel, of course. The huge success of Minitel in France was not at all reflected abroad by cons who already saw the advent of the Internet point. Today, the Minitel is almost over. Still, some companies still offer credit to their customers to be able to apply through this medium, considered more secure. Cetelem is the case with 36 15 code CETELEM …
Finally, the Internet, the credit line. What could be simpler than to connect from home, without limit, without counting the minutes? This means credit application was therefore a natural choice. The customer can fill in online records, calculate its immediate borrowing rights with the various calculators, make comparisons between the different offers on the market in the blink of an eye thanks to the various sites … everything is comparative to direct users, who no mistake more, can easily choose the best credit for his immediate needs.
What I find more convenient with internet when talking about credit, it’s definitely the possibility of borrowing simulations on different sites and compare. You can see very quickly what the best loan offer, quietly at home, to be sure to get the best rates and best service.
Yes, Internet has become indispensable to its credit
Glossary to better understand the credit
Internet: In the world of credit, the advent of the Internet has profoundly change the way we work for financial companies. It’s easy and saves time for customers, who can immediately make their simulations online credit applications, without leaving the comfort of their homes.
Internet has also allowed us to compete with players credit, to be sure you get the best financing for their project. Many online brokers can easily get several quotes, and take advantage of several offers, tailored to the credit needs of the applicant.
What is purchasing power?
Purchasing power is what you can buy with his money, period. It is the only true measure of wealth and well they should be taken into account, beyond simple cash values. This is simply the amount of things you can buy with their wages. The more we can buy things, the more buying power is strong. So it’s not necessarily a story of money. For example, if the essence of your car costs less, you will have more purchasing power, since the money you will not give the attendant, you can buy something else with.
Purchasing power, so it is what a person can buy with his income. This is the most reliable measure of the quality of life of a person’s income level: rather than looking at the percentage of pure increase an employee was, we must rather look at what it can buy more with the money.
If the salary increase was 3%, but inflation, rising prices, was 5%, the employee has been lost in purchasing power: it can buy fewer things that before.
When prices rise (called inflation), if a salary is not increased in the same way, we lose purchasing power. Naturally, if everything is more expensive, but we continue to win the same thing, we can buy less. So just because you win five dollars more this month we have always gained purchasing power, as what you buy usually costs us 6 euros more: we lost a euro purchasing power.