What is consumer credit?

Consumer credit, or consumer debt, is personal debt taken on to purchase goods and services. Although any type of personal loan could be labeled consumer credit, the term is more often used to describe unsecured debt of smaller amounts.

What are the different types of consumer credit?

Consumer credit encompasses various financial products, including credit cards, car loans, personal loans, student loans, mobile home loans, and home improvement loans. Notably, consumer credit involves smaller loans without collateral, distinguishing it from larger loans like mortgages.

Is a personal loan considered consumer credit?

Although any type of personal loan could be labeled consumer credit, the term is more often used to describe unsecured debt of smaller amounts. A credit card is one type of consumer credit in finance, but a mortgage is not considered consumer credit because it is backed with the property as collateral.