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.
Know the benefits and detriments of personal finance loansBefore 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.
consumer finance scams at the Federal Trade Commission's website.
Research and compare before choosing a consumer finance company for customersYou want to offer customers the best consumer finance options possible, so compare consumer finance companies and banks before choosing one.
Consider consumer financing for your businessConsumer financing can provide funding for businesses--not just their customers. Consider it for things like new must-have equipment and business expansion.
- 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.