Types of Consumer Finance?

▪ Mortgages: Used by consumers to finance the purchase of a house.

▪ Credit cards: Used by consumers to finance everyday purchases.

▪ Auto loans: Used by consumers to finance the purchase of a vehicle.

▪ Education loans: Used by consumers to finance education.

▪ Refinance Loans : Used by consumers to refinance an already

existing loan.

▪ Home Equity Loans : Used by consumers for making

improvements to the houses

▪ Personal loans: Used by consumers for personal purposes.

 Types of Consumer Finance

1.Mortgages:
Mortgages are typically linked to buying a new house. Banks give this type based on the
credit score and the ability of down payment, which a borrower has to facilitate buying a
new home.

2.Credit Cards:
This is the most widely used and popular consumer loan. A credit card helps borrowers
purchase their daily needs, from apparel to groceries, through a credit line granted to them
by the credit card company. However, the interest charges are a bit high in this case, and
failing to pay attracts a high level of penalty.

3.Auto Loans:
Auto loans are typically meant for buying vehicles. These are generally available at the bank
or the car dealership itself.

4.Education Loans:
Education loans are targeted to fulfill the education needs of students in terms of paying
their college or tuition fees. It helps students pursue their education, and the loan
repayment starts when they have graduated from college.
 Types of Consumer Finance

5.Refinance Loans:
A refinances the loan, as the name suggests, is used to refinance an already existing
loan. For example, one can use it to refinance their car loans, education loans, house
loans, and even credit cards. A refinance loan ideally has a fixed payment at a lower
interest rate, which helps the borrower close the earlier loan.

6.Home Equity Loans:

This is a kind of consumer loan where one can utilize the equity value of one’s home
to borrow money. Typically, this is used for making improvements to the houses.

7.Personal Loans:
Personal loans cater to the buyer’s daily needs and can work on various purchases.
Personal loans allow the borrower to do anything from repairs to business
investments.