Consumer credit
There are various forms of consumer credit, such as a personal loan, revolving credit, overdrafting at the bank, installment purchase and hire purchase.
Personal loan
Do you want to borrow an amount once to finance a major purchase such as a car or a new kitchen? Then a personal loan is a good solution for you. With a personal loan you know exactly where you stand: you borrow an amount once, with a predetermined interest rate and term. This way you will not be faced with surprises afterwards.
Revolving credit
With a revolving credit you can flexibly withdraw and repay money. You may take more in one month than in another. And that works out well. Because you only pay interest on the amount that you have withdrawn from your revolving credit. Another additional advantage of a revolving credit is that you are not bound by a fixed term. You can withdraw a sum of money at any time for an indefinite period of time. With a revolving credit, the interest is variable. This means that the interest can be higher one month than the other.
Credit card
A credit card has a predetermined limit over which you pay interest and repayment on the outstanding amount. The interest rate is variable. The interest on a credit card is generally higher than that of a personal loan or revolving credit.
Red at the bank
Being in the red at the bank is also a form of consumer credit. Being in the red at the bank is useful when you just run out of money to get through the month. The interest on this credit is in most cases very high.
Hire purchase
It is possible at a number of web shops or physical stores to buy on installment. The interest on this is in most cases high. Because you have part of the amount open at the store during the payment, this is also seen as a consumer credit.