2. INTRODUCTION
Consumer finance refers to the raising of finance by
individuals for meeting their personal expenditure or for
the acquisition of durable consumer goods
Consumer durables include -
Cars, Two Wheelers,
LCD TVs, Refrigerators,
washing Machines, Home Appliances, Personal Computers,
Cooking Ranges,
Food Processors
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3. Needs of consumer Finance
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◉ It assists consumers to acquire assets.
◉Attract more customers
◉ Better consumer service
◉ Increased Loyalty, Trust & Referrals
◉ Improve the cash flow of the company
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Forms/Types of Consumer Credit
Revolving Credit
It is similar to overdraft facility credit limit will be sanctioned to the customer and the
customer can avail credit to the extent of credit limit sanctioned by the financier
Secured Credit:
, the financier advances money on the security of appropriate collateral. The collateral
may be in the form of personal or real assets. If the customer makes default in
payments,
Fixed Credit:
finance is made available to the customer as term loan for a fixed period of time i.e.,
for a period of one to five years. Monthly installment loan, hire purchase etc. are the
examples
5. Unsecured Credit:
When financier advances fund without any security, such advances are called unsecured
consumer credit. This type of credit is granted only to reputed customers.
Credit Unions (CUs)
A credit union is a nonprofit financial institution that’s owned by the people who use its
financial products. aim to serve members by offering competitive products with better rates
and fees than you see with a for-profit bank.
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