Consumer Finance

AARP Capital One Financial E-Loan Inc. Finantra Capital

HOUSEHOLD INTERNATIONAL INC Lendingtree, Inc. MBNA Corporation Onyx Acceptance Corporation

Providian Financial Corporation World Acceptance Corporation

Guide to Consumer Finance

Offer consumer financing to customers with bad credit
By Sharon Cullars

Consumer finance, in its broadest sense, covers every type of consumer lending, including loans from retail banking and finance companies. For customers with low credit ratings, consumer financing is often their only option to receive an unsecured loan. Too often, though, some consumer finance companies offer sub-prime lending to those who simply cannot afford the interest rates and repayment schedules, further compromising their already shaky credit status. Still, consumer financing is a viable component of a stimulated economy, allowing consumers to purchase big-ticket items like windows, pools or spas, furniture and other home improvement items.

Be a responsible business owner by offering a customer a personal finance loan only from reputable lenders. Too often, consumers neglect to read the fine print of their contracts and are caught by surprise when interest rates unexpectedly hike. Make sure the consumer finance company you offer customers is a reputable one that provides loan rates that don't border on usury.

Here are things you should consider before offering customers a personal finance loan:

1. Learn the pros and cons of consumer financing.

2. Research consumer finance companies.

3. Read up on consumer finance information.

Action Steps

The best contacts and resources to help you get it done

Know the benefits and detriments of personal finance loans Before you offer consumer financing to your customers, understand the process and products of consumer financing so you can explain the pros and cons to your customers.

I recommend:  Dart-Creations provides a caveat emptor about consumer finance companies in general. Learn about consumer finance scams at the Federal Trade Commission's website.

Research and compare before choosing a consumer finance company for customers You want to offer customers the best consumer finance options possible, so compare consumer finance companies and banks before choosing one.

I recommend:  Wells Fargo and Citibank are both reputable lenders with competitive rates on consumer finance products.

Consider consumer financing for your business Consumer financing can provide funding for businesses--not just their customers. Consider it for things like new must-have equipment and business expansion.

I recommend:  CitiFinancial makes it easy for businesses to get cash quick, if needed. You can even fill out a loan application online. Accommodative Financial Solutions can give you an immediate response to see if your company pre-qualifies for consumer financing.

Tips & Tactics

Helpful advice for making the most of this Guide

• Take advantage of free online loan calculators to determine pay schedules for you or your customers.
• Check for online or local seminars on consumer finance to get the most information possible before offering these types of loans to your customers.