What is more profitable: a car loan or a consumer loan
Posted: Wed Feb 19, 2025 4:45 am
If you want to borrow money from a bank to buy a car, you can apply for a car loan or a consumer cash loan. Both options have their strengths and weaknesses, and the decision is always made individually. We will tell you how the lending programs differ from each other, in which cases it is worth choosing a car loan, and in which cases - a traditional non-targeted loan.
What is a consumer loan
A consumer loan (CL) is any loan issued by a bank to an individual. There are two main target types:
for any purpose;
for a specific purpose (targeted).
If you take a loan for any purpose, you receive cash (usually denmark mobile database by transfer to a card), which you can spend on anything. In the case of targeted lending, the money is spent on a purchase and immediately transferred to the seller. A classic example of a targeted consumer loan is an installment plan in a store.
PCs can also be secured and unsecured. In secured lending, the borrower provides the bank with additional guarantees of repayment. This increases the chances of approval, since the bank does not have very high risks. In addition, secured programs usually have more favorable terms. Traditional types of security are collateral and surety.
When we compare a PC with a car loan, we mean a non-earmarked loan without collateral or guarantors.
What is a car loan
Auto loan (AL) is a targeted PC with collateral. The funds are spent on the purchase of a specific car, for which collateral is issued. In order to protect the bank and the borrower from financial risks associated with damage and theft of the car, insurance is issued for it for the entire loan term.
Banks offer car loan programs created jointly with partner stores. They have lower rates and longer terms.
What is a consumer loan
A consumer loan (CL) is any loan issued by a bank to an individual. There are two main target types:
for any purpose;
for a specific purpose (targeted).
If you take a loan for any purpose, you receive cash (usually denmark mobile database by transfer to a card), which you can spend on anything. In the case of targeted lending, the money is spent on a purchase and immediately transferred to the seller. A classic example of a targeted consumer loan is an installment plan in a store.
PCs can also be secured and unsecured. In secured lending, the borrower provides the bank with additional guarantees of repayment. This increases the chances of approval, since the bank does not have very high risks. In addition, secured programs usually have more favorable terms. Traditional types of security are collateral and surety.
When we compare a PC with a car loan, we mean a non-earmarked loan without collateral or guarantors.
What is a car loan
Auto loan (AL) is a targeted PC with collateral. The funds are spent on the purchase of a specific car, for which collateral is issued. In order to protect the bank and the borrower from financial risks associated with damage and theft of the car, insurance is issued for it for the entire loan term.
Banks offer car loan programs created jointly with partner stores. They have lower rates and longer terms.