What are consumer loans? A consumer credit is a short-term loan that aims to pay for a service or purchase. This could be: paying for a trip, buying home appliances or electronics, home repairs, buying computers, or other purposes.
A consumer loan is granted without a pledge, but the loan company assesses the borrower’s monthly income and repayment ability.
When to Take Consumer Credit?
If you have an unexpected expense or need to make an urgent purchase, or simply buy a long-coveted item or trip that is currently being offered at a bargain price, then the consumer credit may be the best option.
In Latvia consumer loans are offered on average from 100 $ to 7000 $, repayment term is mostly from 3 to 5 years. Both the maximum loan amount and the repayment term are determined by the lender when considering the loan application.
Quite often in Latvia we face the practice of low salaries and then the lender offers a loan with a longer repayment period, the longer the repayment period, the lower the monthly payments. This gives the lender a higher return, but there is always the possibility of repaying the loan previously borrowed without penalty.
Interest rates for consumer credit companies vary
Typically, the interest rate offered by lenders at the time the loan is issued will not change throughout the term, meaning that there will be equal payments during the repayment period, which will not suddenly be higher.
Quite important when a lender makes a decision about granting a loan is also how successful the cooperation with the lender has been in the past.
A consumer loan is suitable for people with a solid income
Meaning if you are new to the job, getting a consumer loan can prove to be a difficult process, you may need a guarantor, but if you decide to borrow a consumer loan then definitely before borrowing a consumer loan, be sure to read the lender’s consumer credit terms.