Negative effects of consumer loans. 1. Its excessive development will increase economic instability, and consumption will cause inflation and value crisis. 2. For countries with insufficient supply and consumption, especially consumer goods, the consumption of such credit will aggravate the tension between supply and demand, and consumption will easily lead to demand-driven inflation. 3. In countries with relative overproduction, although consumption can change the situation of insufficient consumption, it will deepen the contradiction between supply and demand, and consumption will cause a greater disconnect between supply and demand. 4. Advance consumption can't fundamentally solve the contradiction between production and consumption, but consumption only postpones the problem. If it is not properly solved, it will eventually affect the income level of consumers, resulting in payment difficulties or payment crises.
Consumer credit is also called retail credit. Credit provided by banks or enterprises to consumers. Under the capitalist system, the main forms of consumer credit are "installment payment" and "consumer loan". Installment payment is a skill for capitalists to sell goods. Its business content is that when consumers buy high-end goods, they can get the goods without paying or paying part of the money, and then repay the arrears in installments. If the consumer can't repay the money on time, the goods he bought will be taken back and the paid money will not be returned. Consumer loans are loans provided by banks to consumers through credit loans or mortgage loans, as well as credit cards and check guarantee cards. Consumer loans are generally provided to people who are unable to pay in reality. Buyers of houses and cars are the main targets of consumer loans in capitalist countries, and individuals obtain mortgage loans with their houses and cars as collateral.
Credit is a kind of ability to obtain funds, materials and services without immediate payment based on the trust of the principal in the trustee's repayment commitment. The so-called credit consumption, also known as credit consumption, refers to the transaction mode in which consumers obtain funds, materials or services by virtue of personal credit in order to achieve a certain consumption purpose without immediate payment.
Credit consumption, from the perspective of banks or other financial institutions, is usually called consumer credit, that is, loans issued by commercial banks to consumers for purchasing durable consumer goods or paying other expenses. Its purpose is to stimulate consumption, expand commodity sales and accelerate capital turnover. Many people also call it "using tomorrow's money to fulfill today's dreams".
At present, consumer credit is developing rapidly in the world. Consumer credit in the United States began in the 1940s. After a long period of development, the consumer credit system has been relatively sound, and the legislation is gradually improving. Reasons for the existence of consumer credit:
1. The demand for high-end durable consumer goods has increased.
2. Solve the needs of family income and expenditure time mismatch.
3. Consumer credit will be realized by using future income in advance.
4. From the economic analysis, this way can maximize the utility of consumers all their lives.