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Empowering Consumers: A Look at Consumer Finance

January 16, 2024 • 3825 views

Consumer finance is a lending scheme that enables customers to pay for products over time. It makes cash flow predictable. This financing option helps to convert passive browsers into active buyers and promotes customer loyalty.

In this blog, we discuss about consumer finance, how it helps attain financial empowerment, the benefits of availing it, and tools and strategies to manage it efficiently.

How Does Consumer Finance Help Attain Financial Empowerment?

Here are the ways consumer finance helps attain financial empowerment:

  • Consumer finance allows you to make purchases you could not afford in the past. The availability of reliable, quality, and affordable financial products helps you address varied financial obligations and be financially empowered.
  • Consumer finance can be offered by retailers or businesses to consumers using their funds or that of a lending bank or company. It helps boost conversion rates and sales, which in turn helps increase revenue.
  • Consumer financing comes in handy to back unexpected expenses. If you need funds to fix your broken-down appliance or car, a revolving credit helps you tide over the sudden expenses. Moreover, with the availability of financing choices, you no longer have to carry substantial cash while shopping.
  • Additionally, you do not have to save for years to accumulate the cost of a purchase. Instead, you can opt for payment plans to help you access the services or products.

What Are the Different Types of Consumer Credit?

You can access customer finance in varied forms like consumer loans, store credit cards, BNPL (Buy Now, Pay Later) programs, etc. The consumer finance option can also be secured or unsecured. Secured consumer finance enables you to get a higher loan amount. On the other hand, with unsecured consumer financing, you can access a limited amount of money.

Here are the different types of consumer credit you can choose from:

Consumer Loans

As the name suggests, consumer loans are meant for larger purchases. The credit option comes with an interest rate. This credit option has a simple payment structure. Consumers availing of this credit option know what they will pay even before they accept the financing agreement.

BNPL Programs

This payment plan comes with minimal or no interest. It enables customers to translate their purchases into many payments. Further, this consumer financing option is not reported to the credit bureaus as it is done in the case of other credit options. As consumer financing does not carry any interest, it becomes easier for consumers to understand.

Store Credit Cards

These credit cards are extended by merchants who offer benefits to customers for making purchases from them specifically. This credit card either comes with minimal or no interest or is offered on a point-based system. These credit cards are revolving credit and have a higher APR (Annual Percentage Rate) than traditional credit cards.

Also Read - What is Debt Financing? Meaning, Types & Its Advantages and Disadvantages

How Will You Make the Most of Consumer Finance?

You must have an idea of the following pointers to reap the benefits of Consumer Finance.

  • Know the Importance of Financial Literacy

Financial literacy will help you attain your goal and make informed decisions. Developing and knowing how to use financial skills like investing and budgeting will help you achieve financial stability and reduce expenses. Moreover, it is essential to know about the particularities of the consumer financing choice before availing it to escape last-minute surprises.

  • Know the Strategies for Financial Empowerment

You should know the strategies to make the most of a credit option. If you manage many credit card payments and have other loan liabilities, it is better to consolidate all the debts and go ahead with a consumer finance option. You must know the hidden charges associated with a consumer finance option, like processing fees, late payment fees, etc.

  • Be Aware of Consumer Finance Tools and Resources

When you are availing of consumer finance, prepare to make an informed financial decision with the help of the available consumer finance tools and resources. It will help you make a budget and borrow the exact amount. You can access loan companions tools, an eligibility calculator, etc., and make your borrowing productive.

Also Read - Business Finance: Meaning, Sources, and Types 

To Conclude

Consumer finance is a form of lending through which you, as a customer, can get financial backup for personal and household purposes. The manifold credit option under consumer finance allows you to spread the cost over time. If you want to avail yourself of a consumer financing option, contact Poonawalla Fincorp.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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