Consumer Credit: How does it work and what is it?

As a way to encourage and, mainly, make some purchases viable. Be it acquisitions and investments, the market decided to create a modality of consumer credit. Although its name is little spread, this is one of the financing modalities that is more popular. It is widely used throughout our society.

If you want to know a little more about this type of credit, stay inside of how everything works and still learn how it is and how best to use it, keep reading this article!

What is famous consumer credit, after all?

Credit Loan

Consumer credit or direct consumer credit (CDC) is a form of differentiated financing. It is granted to the consumer who wishes to acquire some durable good. Or even without the consumer showing some specific purpose.

In general, this financing will be offered by banks, financial agencies, and also by stores. But nevertheless, only those of department, that usually lend values ​​to its consumers. This is done so that they can make their own investments. Generally this type of credit is taken to be able to buy higher-value home appliances, or automotive vehicles.

This means that the consumer who, for example, bought a refrigerator in various installments. Whether it is for a card in the store itself, or for a credit card, he made use of direct consumer credit.

In cases like the use of carnet, the financing was done directly with the store in which the item was purchased. In the case of credit cards, the financing is made entirely by the agency. Be a financial or bank.

This is one of the most classic and most used ways to get a loan in Brazil. The truth is people do not even know that the carnet and the credit card are forms of borrowing. This is because they are accustomed to using these modalities.

The purpose of this type of credit is to cede to the consumer the necessary means so that he can buy goods or pay for some service that he otherwise could not afford to pay.

How does this consumer credit work?

Credit loan

Consumer credit directly works differently. It works according to the entity that will grant the loan. Thus, if the credit is requested directly from banks or financial agencies, the credit is granted in kind, that is, directly in cash.

This means that the applicant receives the money on time and can spend as he sees fit. This value, however, should always be within the limit that is pre-approved. Be it by the agency or bank. On the other hand, in department stores, crediários are offered to those who wish to make purchases. But as long as they are up to the limit it is pre-approved in the store itself.

This credit limit, which is a pre-approved amount, can be set with an income analysis and bank transaction history. Thus, we also analyze the absence of restrictions. Sometimes even those values ​​of purchases that were made previously. All these situations are analyzed together to demonstrate the actual ability of the applicant, and serve to guide the agency in defining the pre-approved threshold for each individual in particular.

The fees that must be paid by the client on account of the requested loan are agreed directly between the agency, bank or shop with the client. However, the maximum term for this debt to be paid usually turns around 60 months.

What are the various advantages of consumer credit?

Undoubtedly, one of the main advantages that this modality offers is that the applicant obtains the good that he wants to finance immediately. He already leaves the store with what he wants at hand, even though he has not yet finished paying his full amount.

In addition, the requester has the chance to choose which amount he wishes to pay as input, as well as the amount he wishes to fund. No matter how much the value of each installment is automatically defined, the consumer can still anticipate the installments (if he wishes), in the same way that he can fully repay the loan at any time, which generally implies the reduction of interest that are incidental to plots.

Another advantage that this type of credit offers is the fact that the customer can opt for a fixed-rate contract, where interest is directly embedded in the parcels. This type of contract makes it possible to know, exactly and in advance, what amount will be paid every month throughout the entire funding discharge.

Direct consumer credit can be used wisely by anyone who wants to pay for a purchase, but it’s always a good idea to remember that you have a debt that must be paid off, and advancing installments is always a good choice when that is possible!

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