What Is Personal Loan?(1)
Personal loans, also known as retail loans, originated in Western countries after World War II and became a major lending company after decades of development. The main reasons for the rapid development of retail lending in the West after the war are: First, competition between financial institutions is becoming increasingly fierce, recognizing the importance of retail trade, secondly, the economic development of the West after the war is relatively stable, personal income is higher, people are happy to use loans for consumption and third, a large number of credit bureaus, so that banks can easily and quickly understand the credit status of borrowers.
Types of Personal Loans
Ⅰ. Residential mortgage
1. Commercial personal housing loans
A commercial loan for personal housing is an independent loan issued by a bank credit fund, which refers to a natural person with full civilian capacity, and when purchasing a self-occupied home in a city in that city, he asks the bank for a commercial housing loan as a loan repayment guarantee using the property right housing purchased by him as a mortgage.
2. Loans of personal housing contingency funds
The loan of personal housing contingency funds, is a housing contingency fund of policy issued by the entrusted loan, refers to the deposit of workers of housing contingency funds, in the cities of the city to buy, build, rebuild, revise the self-occupied housing, with its own housing property rights as collateral, as collateral to repay the loan and apply to the bank for loans of housing contingency funds.
3. Personal housing portfolio loans
When the borrower who fulfills the conditions of the commercial loan of individual dwellings at the same time pay the providential housing fund, in the treatment of personal housing commercial loans can apply to the bank for personal housing loans of contingency funds, i.e., the borrower purchased the self-occupied urban housing of the city as collateral can also ask the bank for personal housing loans of pension funds and personal housing loans commercial loans (this method loan accommodation is called personal housing portfolio loans).
Ⅱ. Non-residential mortgages
1. Loans paid in installments
2. Single loan repayment
3. Credit card loans: Credit cards are any card, disk and other tools that can be used and repeatedly to borrow money or buy goods and services in the form of credit.
Characteristics of personal loans
1. high interest rates;
2. the scale of the periodical;
3. borrower lacks interest rate flexibility
Prices of personal loans
1. Determining interest rates on consumer loans
1) Annual method as a percentage
2) Single-rate method
3) Discount rate method
4) Additional loan rate method
5) Compensation balance requirements.
2. The use of variable interest rate consumer loans