Skip to main content

What Is Consumer Financing & Why Is It Useful ?

Ever heard the term consumer finance? You might think I know what’s a consumer and what finance means but consumer finance is an alien term.

So, let us give you a tour of the world of consumer financing.

What Is Consumer Financing?

Consumer financing means lending money or granting credits to consumers so that they could buy goods of their everyday needs or spend it on some other necessities like a property, a TV, or even that branded watch you want.

Types Of Consumer Financing :

Consumer finance is divided into various categories:

  • Revolving Credit : revolving credit is a process in which the credit is granted throughout the granting period and the limit is set on the amount of money one can withdraw just like a credit card.
  • Fixed Credit : fixed credit is a process in which credit is granted for a particular period and the sum credited could be varied and does not have a limit just like loans.

Who Lends The Money?

The source through which consumer financing is received are many, and some of them are listed below.

Traders :

Traders play a prominent role in consumer financing it involves finance companies and other financial institutions that grant the credits to the consumer.

Commercial Banks :

Banks lend a huge sum of money to consumers with varied interest rates thus proving one the most important source for consumer financing.

Credit Card Companies :

Credit card companies provide various packages to choose from according to your requirement. These ensure limited cash as per limits provided but also ensure cash safety.

Why Is Consumer Financing Useful?

Can be used in emergencies:

Consumer Financing proves most useful in an emergency, a huge sum of money is available to you in times of emergencies like illness, accidents, or natural calamities and you get a long duration to repay as well.

Meeting Needs :

It helps in meeting the daily needs of people in a situation where we buy a house or even a few other necessities.

Saving :

It ensures people save money and teaches them appropriate money management skills.

Investment :

It could prove useful in making investments in shares and deposits thus give you financial security as well.

Thus, we can say that consumer financing is a way people acquire money to meet their money needs, it is extremely useful and ensures a good saving practice as well as a standard of living.

Labels:

Comments

Post a Comment

Popular posts from this blog

Are You Looking to Establish a System of POS Financing in Your Business?

  Do you own a small business or are you starting a new retail business? Are you planning on establishing a pos financing system? Here are all the things you should know about. Pos financing converts the bills of the customers in easy installments spread over a period of time as per the convenience of the store or the customer. Why is Pos financing important? The system of Pos financing has been changes over the time span of few years. There have been various changes in the system which offers more flexibility to the consumers and the end users and turns up the sales of the merchant company. The few variations are guaranteed approvals, zero interest charges on the payments and bills and easy and no paper work requirements for availing these services. With the introduction of these services, customers are buying more items and the sales have gone considerably up profiting all the parties involved. As you are starting your own business, turning potential customers to your clients is...
Post a Comment
Read more

Five Tips for Sales Financing

Sales financing is a type of sales contract where a salesperson obtains funds for the sale from an outside party. This article will go into detail about five tips to help salespeople get sales financing and promote it as an option when talking with potential buyers. Read on to find out more! Sales financing is a type of sales contract where a salesperson obtains funds for the sale from an outside party. This article will go into detail about five tips to help salespeople get sales financing and promote it as an option when talking with potential buyers. Read on to find out more! 1) Sales financing is available from many different sales financing lenders. This means that salespeople are not limited to just one option when it comes time to find a lender and obtain funding for their sales deals. Instead of having to go through the often lengthy process of finding each individual buyer's preferred lending institution or other external source, salespeople can simply talk with their com...
Post a Comment
Read more

Is It a Good Idea to Finance Furniture?

  Buying furniture can be quite a hassle and it is not always easy to find the best deals. That is why consumers end up buying things that aren't necessarily worth the money they spend as they tend to be blinded by their immediate needs. In order to be more knowledgeable about buying furniture, it can help if consumers are aware of some misconceptions when it comes to financing furniture purchases. Financial managers should refer to this article when talking about financing certain items like furniture or home improvement purchases. Furniture Purchases: The Biggest Mistake to Avoid In order to avoid making the biggest mistake that consumers can, they should be aware of what can actually be financed and what can't. For instance, it is true that furniture stores like Ikea can offer financing for some items but not others. For example, the bedroom suite from Ikea cannot be financed while the TV can. Improper financing arrangements are also a big problem in modern times. Financing ...
Post a Comment
Read more