All About Consumer Credit Loan You Should Know
What is consumer credit loan?
So-called consumer credit loan, that is, consumers, depends on credit to obtain the right to use goods, and then return the purchase price in time to purchase goods. Consumer credit has a long history. Before the liberation of our country, some stores usually sell on credit, at the same time to collect accounts, it is also consumer credit.
Since the war, consumer credit loan has prevailed in Western countries due to the rapid development of production and the oversupply of many commodities. In the United States, for example, consumer credit reached $1.4 trillion in 1980, an average of $6,298 per person.
Types of consumer credit
(1) Short-term credit
For example, a consumer buys goods from a retail store that requires no immediate payment of the purchase price, a certain credit term, no interest if the customer pays the purchase in the period, and interest is charged if the term is exceeded.
(2) Buy a house, pay in installments
When a consumer buys a home, he pays only part of the house, but he is required to borrow money from the bank to buy the house he bought, and then he pays the bank loans and interest in instalments over a period of several years under the terms of the loan agreement (the amount of monthly repayments is about the same as the rent for the monthly rental of the house). The buyer buys the house this way with the right to renovate, renovate and sell, and the value of the house is not affected by the currency devaluation. Buying a home in installments is essentially a long-term saving.
(3) Buy ingestable consumer goods
When a consumer buys durable consumer goods such as refrigerators and expensive furniture from a store, they usually sign a payment contract, pay part of the purchase price, and the rest is paid in installments on a planned basis with interest on a plan. If the customer does not pay according to the contract for several months, the store has the right to take back the original goods.
(4) Credit by credit card
The United States is the birthplace of credit cards. There are two categories of U.S. credit cards: one is issued by department stores, supermarkets, customers can use the card in company stores to buy goods, and the other is issued by financial institutions, credit cards, available worldwide.
Benefits of consumer credit loan development
The development of consumer credit loan is conducive to improving the consumer trend and increasing domestic demand.
Opening up the domestic market and increasing domestic demand is the fundamental anchor and long-term strategic choice of China's economic development, so effectively boosting consumption is an important guarantee for the Chinese economy to maintain stable and long-term growth. In particular, China's current economic exploitation presents the characteristics of relative oversupply and deflation, the consumer goods market from the seller's market to the buyer's market configuration, on the other hand, the resident savings rate is rising, the marginal consumption trend is declining, in this case, in recent years, the country has introduced a series of expansion of investment demand from fiscal policy and monetary policy. , but in the field of consumption, the consumer market is still weak, the expansion of investment demand to stimulate consumption is limited, the increase in domestic demand, the stimulation of consumption also depends on the development of consumer credit and therefore the expansion of effective demand. We know that investment and consumption are the two drivers of economic growth, in order to make the trend of economic growth driven by sustainable investment, consumer demand must keep pace with time, the development of credit consumption is an important way to increase consumer demand. From all over society, because consumption and production cannot be completely synchronized, consumption is always lagging behind production, there is some lag between the two, the implementation of consumer credit helps to increase cash consumption, maintain a virtuous circle of production and consumption. In the current economic situation, consumer credit in particular has the following particular practical importance. Consumer credit is an effective measure to regulate the current macroeconomics. It can be said that insufficient consumer demand is a major problem in China's current economic growth, and that consumer credit, through consumer credit, to support the expansion of demand, can achieve the objective of launching the consumer goods market to stimulate economic growth. The government guides the investment of consumer spending through consumer credit, consciously accelerates or delays the social realization of certain types of consumption, can also effectively promote the adjustment and upgrading of the industrial structure, achieve the optimization of the economic structure, and make economic growth a virtuous circle.
Second, the development of consumer credit is helping to drive economic growth.
Consumption growth has always been the starting point and destination of economic activities, and consumption is also the pseudo-true meaning of market economic development. Growth in household consumption and an upgrading of the consumer demand structure are the fundamental drivers of the expansion of the economic scale and the evolution of the economy to a higher level. The contribution of household consumption to domestic economic growth is estimated at 64.8% in South Korea, 66.4% in Japan and 68% in the United States, while the Chinese index is about 50%. In developed countries, credit consumption accounts for 30% of their total consumption. According to this calculation, in China can increase consumption by about 130 billion yuan, will boost consumption growth by about 4.5 percentage points, if consumption at the rate of contribution to economic growth of 50%, will eventually stimulate economic growth by 2.3 percentage points. At present, our level of consumption in the haves, faced with the upgrade of consumption, a single important payment is one of the important characteristics, will also be a frequent problem. Thanks to consumer credit, some residents who urgently need to improve their living conditions and have some economic strength realize in advance the demand for high-value consumer goods such as housing and automobiles, and also contribute to improving the quality of living and promoting the successful realization of the value of social consumption. In fact, consumer credit is a sign that a person or even a nation does not trust - dare not spend the money earned in the future, therefore, through the development of consumer credit, can fundamentally change the traditional policy and the concept of restricting consumption, consumption and production of organic labor, boosting workers' enthusiasm for work , improve labour productivity, and ultimately improve people's drinking standards.
Finally, the development of consumer credit can optimize the structure of social credit, so that the creditor's rights and debts are organically integrated, in order to improve the internal credit restriction mechanism and the credit level of the company as a whole.