Consumer credit is defined as the provision in connection with a trade or professional credit in the form of a deferred payment, loan or other similar financial assistance to a person who is acting for purposes unrelated to business or professional activity. Consumer credit, therefore, is a form of financing intended only for consumers, ie to the individual and families who need financial help to plan the purchase of consumer durables and and / or services. Consumers who use consumer credit take advantage of the opportunity to repay in installments. It currently applies to loans made to consumers for amounts of less than € 31.000 regardless of the technical form and purpose.
Consumer credit is fundamentally different from non purpose and finalized loans. In the first, the customer is bound to purchase a specific service or commodity and can pay in installments. The products and services for which you can avail the loan purpose are varied. Among them we can mention the automobile, travel, education, marriage, medical expenses and furnishings. The liabilities of the finalized financing are usually paid directly to the seller of the property in question linked by a convention lender institution. If The loan has not been finalized the consumer is free to use the sum of money required for the purposes it deems appropriate without informing the bank about the intended purpose of the loan received. Among the latter are included personal loans, loans granted in the form of transfer of salary and credit cards installment repayment so called revolving.
Specifically, the personal loans are forms of financing that may or may not be designed to a fixed purpose with payment funded directly to the applicant and for which there is a fixed term and a fixed number of installments. The disposal of salary regarding personal loans reserved for public and private employees with responsibility for payment of a portion of the salary can at best be equal to one fifth of the same. The applicant gives an irrevocable proxy to the employer who holds the salary, the amount corresponding to the installment of the loan granted by a bank. The installments are then paid directly by the employer who deducts the amount from the employee’s pay. The sale of the salary is a form of credit that is spreading rapidly since the law n ° 80/2005 has extended the scope of its application as well as to public and private employees for periods not exceeding 10 years and guaranteed by life insurance.
The revolving credit facilities are often associated with a magnetic card called revolving. The card is a revolving credit account that has an associated permanent revolving credit. The credit principal amount can be redeemed, the line of credit can be restored and therefore can be reused by the customer. Consumer credit is thus the type of funding through which end users meet their need for goods and services using the deferral of payments over time thus freeing themselves from the constraints imposed by the savings already made.