A Consumer Loan is generally a personal fixed rate installment loan with fixed repayment terms. Consumer Loans are intended for credit worthy salary and wage earners who must be of age majority. They can be granted for the purchase of consumer goods and services, for consolidation of debts or any other worthwhile purpose. Consumer Loans are not to be granted for business purposes or to satisfy business debts.
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There are a number of different types of Consumer Loans:
The main two types are: Direct and Indirect
A direct loan is applied for, arranged, approved and closed at the branch. Direct loans may be granted on a secured or unsecured basis to qualified customers.
An Indirect loan is applied for by the borrower at a retail outlet (e.g. an automobile dealership), and after approval by the Bank, loan funds are sent directly to the retail outlet.
Take Time to read about some of the Terms and Definitions that are associated with Consumer Loans Amounts
The maximum loan amount, term/amortization depends on the security being pledged.
Security The loan is categorized by the security.
Readily realizable collateral (RRC). RRC represents items that can be redeemed or cashed in order to repay the loan. This would include items such as:
Chattels are moveable assets. The Bank will use significant chattels such as a motor vehicle, boat or a mobile home as security for a Consumer Loan.
Unsecured loans may also be granted for reasonable amounts to qualifying customers.
The term of the loan (the number of months over which the loan must be paid) is set at the time the loan is granted.
Monthly payments are made on the same day each month. Setting a payment date that is suitable to the customer would avoid late payments.
Interest rates vary form country to country. The interest rate on a Consumer Loan depends on a number of factors including: - Security - Purpose - Term
Optional Life Insurance coverage is available to the customers. Life Insurance coverage provides for the loan account to be paid off upon the death of the borrower. In case of joint borrowers who have opted for joint insurance, the loan is paid off upon the death of either borrower.
Optional Joint Life Insurance is available and provides customers and their families with additional comfort and security at a very reasonable cost.
Customers' monthly payments can be automatically deducted from their deposit account.
It Improves Life Style Consumer Loans allow consumers to purchase goods and services through a monthly payment plan, which can improve the standard of living within an individual's means.
For example:
- Buy a car
- Take a vacation
- Pay off bills
- Reduce monthly payments
Consumer Loans do not usually involve substantial legal fees.
Consumer Loans provide customers with the ability to manage their monthly expenses and consolidate their debts. They can have one fixed monthly payment due on a convenient day each month rather than different payments to several companies throughout the month. Customers can control their finances much more easily.
Loans can be rewritten or amended if the customer wishes to borrow additional funds and meets qualifying.