Consumer Credit

Short-term loans made to enable people to purchase goods or services primarily for personal, family, or household purposes.

Consumer credit transactions can be classified into several different classes.

Installment credit involves credit that is repaid by the borrower in several periodic payments; loans repaid in one lump sum are classified as noninstallment credit. Installment credit has expanded in popularity, with an increasing number of consumers buying goods on credit in order to spread repayment of the purchase price and the interest owed on the principal borrowed over an extended time.