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Consumer Loans and Financing Options

March 5th, 2021

It is interesting to note that most of our modern terms involving money have origins in the Greek or Latin languages.

The word ‘Credit’ is taken from the Latin ‘Credo’ which roughly translates to “I Believe”, a fitting meaning to reinforce a tradition of trust that involves monetary transactions. In the days of yore, lending and borrowing were purely done by guarantee through the spoken word rather than the written word. Credit in olden days did not necessarily involve money and the term was used to describe barter exchanges of goods and services.

However, in modern economy, the term credit denotes a transaction involving money. Nowadays long drawn contracts and agreements, most of them worded with legal terms that are beyond the comprehension of ordinary people, fulfill the obligations of lending and receiving.

Credit means deferred payment or payment at a later date for receipt of money, goods or services. The deferred payment (late payment) is what is known as “debt”. Credit is given by a creditor or lender to a debtor or the borrower.

A specified sum of money given to an individual for education, family, household, personal and vehicle purposes is termed a ‘loan’, also called consumer credit, consumer lending or retail lending.

Some broad categorizations of consumer loans

Consumer loans are characterized by different types – convertible loans, installment loans, single loans, secured and unsecured loans, fixed-rate and variable-rate loans etc.

• Single loans – also called interim or bridge loans; as the term suggests, they are for short-term finance requirement. Single loans have to be repaid at the end of the loan term in a lump sum including interest rates.

• Installment loan or EMIs – are paid at regular intervals, usually monthly. Home and vehicle loans come under this category. The longer the repayment term, more the cash flow as interest rate calculations vary.

• Secured loans – in this category, you “secure” an asset, a home, car or any collateral that can be used to recover payment if you fail to make the guaranteed payments. Secured loans also apply to home and car loans and since they are backed by sizeable collateral, interest charges on such loans are lower.

• Unsecured loans – are those that do not require collateral and usually given only to borrowers with excellent credit ratings and histories, more often companies or high net worth individuals and interest rates are compounded.

• Fixed rate loans – a great percentage of consumer loans fit this bracket. The same interest rate applies for the duration of the loan term but when compared to variable rate loans, fixed rate loans attract more interest as there is the likelihood of the lender making losses if the market fluctuates.

• Variable-rate loans – upfront these loans have a lower interest rate and there is the clause of adjustable interest rates applicable at periodic intervals of the loan-term. The rate of interest is based on an index governed by market trends and an interest-rate spread calculated monthly, six-monthly or annually.

• Convertible loans – are ones where the interest structure can vary from a fixed to variable rate of interest or vice-versa at a pre-determined time during the loan-term.

Securing consumer credit or consumer loans can be a very taxing process and requires not only your informed and evaluated inputs but also sound financial advice from an expert financial consultant. It is useful to remember the “Six C’s of Credit”, namely Capacity, Capital, Character, Collateral, Condition and Credit.

The Different Types of Consumer Goods

February 5th, 2021

An item is recognized as a consumer good if it is a real product, which is anything you can feel, hear, smell, see, or taste. In some instances there are different viewpoints on whether or not some goods regarded as real or intangible.

Consumer goods are the products that are sold in stores or online to fulfill the wants and needs of people; the end-user.

Consumer goods are available in a wide selection of products which can include:

Electronic Devices
Utensils
Apparel
Food
Home Products
Paper
Types of Consumer Goods

Below are the six main types of consumer goods and what they involve. You should know all about the goods you are buying and selling in order to succeed in the liquidation business.

Type #1: Staple Goods These are products that are purchased routinely, just about every time you go to the store. Bread, milk, and several personal care products can be considered staple goods.

Type #2: Convenience Items Products that are readily available to customers, without any effort by the consumer; such as assembling the product, are considered convenience products.

Typically, convenience goods are available in the category of items like cigarettes, fast foods, and frozen dinners. The products are sold by wholesalers in order to make them available to the consumers in a larger quantities.

Because of the high purchase quantity, cost for each item is usually low and consumers often see no use in further research since more effort means less savings for the sake of convenience.

From the seller’s viewpoint, the low selling price of convenience goods ensures that profit for each unit purchased is low. As a result, vendors will make an effort to spread these items in bulk throughout as many stores as they possibly can.

Type #3: Shopping Merchandise These include goods shoppers buy and take in on a less regular basis when compared with convenience items. People are ready to take more time finding these types of items considering they are fairly more costly compared to convenience items.

Since people buy less often and are ready to shop around to find these items, the target audience is a lot smaller compared to that of convenience products. As a result, vendors frequently tend to be pickier when deciding on distribution shops to market their shopping merchandise.

Type #4: Unsought Goods and Services Services or goods, such as insurance, that can be found in the marketplace though are often ignored by customers are referred to as unsought goods or services.

These kinds of goods and services are designed to sell to customers through the use of advertising with promotions like a purchase bonus such as discount rates offered only to Internet buyers. These marketing tactics often cause buyers to purchase impulsively.

Type #5: Impulse Goods Impulse goods are items a buyer looks for because something unexpected occurs; such a wife getting pregnant, as well as well-aimed advertising at those who tend to purchase products without any prior planning. Usually the decision to buy these good is based on convenience or pleasure.

Type #6: Specialized Goods These are items tend to have a high price compared to shopping and convenience goods. The length of time a specialized good can be used might take as long as shopping goods, however people are a lot more picky when it comes to specialized goods.

The truth is, most of the time customers know ahead of time which item they have a preference for and will not shop in order to compare, however they will look to find out which retailers sells that specific product at the lowest price.