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    Consumer Credit

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    Drpranav Saraswat
    Consumer credit refers to the granting of credit to individuals for personal or household use. It is also known as deferred payment or installment buying. Types of consumer credit include revolving credit like credit cards, fixed-term loans, secured loans where collateral is provided, and unsecured loans without collateral. Sources of consumer credit include traders, commercial banks, non-banking financial companies, credit unions, and other sources. In India, consumer financing commonly takes the form of installment loans provided directly to individuals or through employers via salary deductions.

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    Consumer Credit

    Uploaded by

    Drpranav Saraswat
    255 views12 pages
    Consumer credit refers to the granting of credit to individuals for personal or household use. It is also known as deferred payment or installment buying. Types of consumer credit include revolving credit like credit cards, fixed-term loans, secured loans where collateral is provided, and unsecured loans without collateral. Sources of consumer credit include traders, commercial banks, non-banking financial companies, credit unions, and other sources. In India, consumer financing commonly takes the form of installment loans provided directly to individuals or through employers via salary deductions.

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    consumer credit in India

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    Consumer Credit..pptx

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    Consumer credit refers to the granting of credit to individuals for personal or household use. It is also known as deferred payment or installment buying. Types of consumer credit include revolving credit like credit cards, fixed-term loans, secured loans where collateral is provided, and unsecured loans without collateral. Sources of consumer credit include traders, commercial banks, non-banking financial companies, credit unions, and other sources. In India, consumer financing commonly takes the form of installment loans provided directly to individuals or through employers via salary deductions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    255 views12 pages

    Consumer Credit

    Uploaded by

    Drpranav Saraswat
    Consumer credit refers to the granting of credit to individuals for personal or household use. It is also known as deferred payment or installment buying. Types of consumer credit include revolving credit like credit cards, fixed-term loans, secured loans where collateral is provided, and unsecured loans without collateral. Sources of consumer credit include traders, commercial banks, non-banking financial companies, credit unions, and other sources. In India, consumer financing commonly takes the form of installment loans provided directly to individuals or through employers via salary deductions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Consumer Credit

    Meaning:
    Meaning The term Consumer Finance refers the activities involved in granting credit to consumer to enable them to possess/ own goods meant for every day use Also known by several names: Credit merchandising/ deferred payment/ installment buying /hire purchase/ pay- out- of income scheme/ easy payment/ credit buying/ installment credit plan, etc..

    Definition
    Definition the term consumer credit refers to a transfer of wealth, the payment of which is deferred in whole part, to future, and is liquidated piecemeal or in successive fractions under a plan agreed upon at the time of transfer. -E. R. A. Seligman

    Types of Credit facility available:


    Types of Credit facility available Revolving Credit Fixed Credit Cash Loan Secured Finance Unsecured Finance

    Revolving Credit: -similar to bank o/d. financier grants credit on a revolving basis. credit limit is sanctioned - eg : Credit Card Fixed Credit: -financier provides loan for a fixed period of time. - eg : monthly installment loan, hire purchase Unsecured Finance: - no security is offered by the consumer against the credit granted

    Cash Loan: -bank & financial institutions are the main providers -provides money to customers for personal consumption. -the lender and seller are different: lender does not have the responsibility of the seller Secured Finance: -the credit granted is secured by a collateral -collateral is taken in order to satisfy the debt in the event of default by the borrower - collateral may be personal property, real property or liquid asset

    Sources of Consumer Finance:


    Traders Commercial Banks Cash Credit Institutions NBFCs Credit Unions Middlemen Other sources

    Traders: Includes sales finance companies, hire purchase & and other financial institutions Commercial Banks: provides direct or indirect finance the consumer durables Banks lend large sum of money at wholesale rate to commercial or sales finance companies, and other such intermediaries Personal loans are also granted without security Credit Card Institutions: Arranges credit purchase facility for consumer articles through respective banks which issue credit card Enables to buy g & s on credit

    NBFCs: Also know as small loan companies or licensed lenders or personal finance companies. Charges substantially high rate of interest than market rates Last resort to consumers Credit Unions: Association of people whom agree to save their money together and in turn provide loans to each other at relatively low rates of interest Nonprofit, deposit- taking, low- cost credit institutions

    Middlemen: Middlemen, such as dealers of consumer articles, grant credit to customers as apart of their promotion campaign This type of arrangement help dealers to maintain a close relationship with customers Other Sources: Savings and Loan Associations Mutual savings Bank

    Demand for Consumer FinanceFactors:


    Demand for Consumer Finance- Factors Several factors work in favor of making consumer finance a popular form of finance. Some of the factors are given below: Increase in consumer disposal income Enhancement in the real income of consumers Convenient size of installment payments Growth in nuclear family leading to spurt in number of house holds Lower Charges Down payment and credit contract.

    Consumer Finance- Practice in India:


    Consumer Finance- Practice in India A popular form of consumer financing in India is installment credit Over- the- counter, one-toone or walk-in financing credit is granted directly to individuals or institutional funding agencies When institutional funding is involved, the financiers disburses the finance in tranches through the employer or the cooperative societies. The loan installment is deducted from the salary of the employees.

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