A consumer finance loan, or CFL, is a type of subprime loan given to borrowers by consumer finance companies. Meeting your payments on a consumer finance loan can help to bolster your credit score.
Who are Consumer Finance Loans for?
Consumer finance loans are for people with less than perfect credit or those that are having difficulty obtaining credit that want to purchase something that is out of their monetary range. Consumer finance loans allow a person to obtain a loan when banks and credit unions deny his/her plea. The lender will usually charge higher interest rates because, when dealing with a consumer finance loan, the borrowers are considered high risk.
What are Consumer Finance Loans Used for?
Consumer finance loans can be used to purchase an automobile, refurnish a home, or even pay off interest rates on a credit card. Consumer finance companies can lend cash to consumers for a variety of purchases. Consumer finance companies want to encourage people to borrow and therefore entice customers with deceptive rates and deals. Consumer finance loans can be dangerous to the economy because many people cannot meet the high interest rates and payments on their loans.