What you need to know about consumer loans
In today’s world unless you are already filthy rich or have received a huge trust fund from your parents, most of the time you will need loans in order to purchase things that we need but cannot pay for in cash. This could be a home equity loan or another type loan called a consumer loan, which is the money lent from one person to another person that is not really that secured by collateral. The people who get consumer loans are usually in need of short-term cash.
With consumer loans there are instances when it will be considered a secured loan which means that you would need to have a collateral or an asset in order to secure the loan. Depending on the bank or creditor the collateral may come in any form like real estate or other investments.
Consumer loans usually would not need a second guarantor to sign the loan. For the unfamiliar a guarantor is a person who signs as a secondary guarantor and basically guarantees that the borrower will repay the loan amount and if the person who borrows is not able to do so, the bank or creditor will have the right to pursue the secondary guarantor for payment.
When applying for a consumer loan, the bank or creditor will require the borrower to submit several documents and other requirements. These will vary from bank to bank and from creditor to creditor. Usually, they would ask the borrower to submit a credit report, tax returns and pay-stubs.The terms of payment in a consumer loan would also vary on the offer made by the bank or creditor. It is usually longer and has a lower interest rate compared to business loans. And once the funds have been released to the borrower the bank or creditor will not usually do any follow up unless the borrower fails to meet the payments due on time.