Features consumer lending abroad

Features consumer lending abroad

In the aftermath of World War II, banks are major creditors of the consumer credit market. The dominant position of banks is partly due to the fact that they are increasingly interested in attracting funds of individuals and families who are the main source of bank funds. However, many families often have to decide whether to give their money to the bank, which they believe will not be able to guarantee them a loan if necessary.
Recent studies have shown that consumer credit is often among the most profitable loans, which the bank can issue [19, p. 334].

Types of loans provided to individuals and families. In foreign practice, known as consumer loans granted to the population for the purchase of durable consumer goods [20, p.34]). Individuals are also other loans (including for the construction and purchase of housing and other urgent needs). This practice has evolved over decades and is characterized by diversity. First of all, it is characterized by a variety of lenders: Bank consumer loans; loans to trade organizations; consumer loans non-bank credit institutions (pawnshops, rental, mutual fund, credit cooperatives, building societies, pension funds, etc.); personal or private consumer loans (provided by individuals); consumer courts, provided the borrowers directly to enterprises and organizations in the workplace.
In Germany, the most common form of consumer credit in favor loan cash advance. It is beneficial to the borrower, since the payment for goods in cash shop can make the customer a discount of up to 5% of the value of goods for the use of such loans, the Bank sets a fixed rate for the entire term of the loan agreement the interest rate level is relatively low maximum period of use of consumer credit in Germany is 6 years The monthly payment on the loan depends on the size of the loan, the term of the loan agreement, the interest rate. After determining the amount of payment, its amount is automatically collected each month from the current account.
Consumer loans in the US (sonsumer loans) are divided into 3 groups:
- A loan with payment by installments;
- Turret (revolving) loans;
- Loans without installment payment
Of the total amount of consumer credit more than 80% from the loan by installments. Maturities typically range from 2 to 5 years. Unlike the majority of revolving credit loans with deferred payment are secured. In the United States, as in other Western countries, loans with payment by installments may be issued in direct or indirect forms. In the direct loan is a loan agreement between the bank and the borrower. When issuing indirect bank credit appears intermediary between the bank and the client - commercial enterprise. There is an agreement between the customer and the store, which then receives a loan from a bank.
Revolving loans include loans provided to customers on credit cards or loans in the form of an overdraft. (Credit cards and overdrafts will be discussed below).
Loans without installment payments are an important feature - on such loans repayment of the loan and interest is carried out at the same time. As an example, "bridging loan" outstanding to buy a new home by a private individual, and the amount of the price difference of old and new home owner.
France also stand out personal loans - a revolving loan to an individual for a period of three months to three years at a rate of not more than one quarter of the annual income of a person Generally, when issuing such loans require a guarantee of a third party plays an important role condition "domicile" income, have revenues borrower's bank account, where the latter is able to control its financial position. Consumer loans are similar in terms of personal
loans, but the interest on them below They are issued for settlement of accounts for the purchase of goods in shops covered by the system of consumer credit. ("Setelem" (Setelem) "Kofinoga" (Sofinoga), etc.).
In the UK, consumer credit is provided for a variety of purposes: purchase of consumer durables; buying a car (maximum period for a used car - 5 years); Celebrations; finishing work in the building; buying houses, caravans; payment of personal education. Loans are issued for amounts in excess of 500 pounds, but not more than 10 000 pounds. Individual borrowers are given the opportunity to insure the loan in case of death, unemployment, accident or illness of the borrower, the maximum period of use of the loan - 5 years. Also, banks may at their own expense to cover payments to its customers in the event of illness or accident, and with the death of the client to repay the loan will be repaid by the bank last completely. But at the same monthly payment the client increases by a small amount of insurance. Insurance Client is automatic and does not involve filling in special forms or medical examination. From insurance can be waived by notifying the Bank in writing upon receipt of the loan application