27003040 consumer finance
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CONSUMER FINANCE
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MEANING OF CONSUMERFINANCE
It refers to the raising of finance by individuals foreeting their !ersonal e"!enditure or for theac#uisition of durable consu er goods and for the
!urchase $creation of an assets %
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IM&OR'AN' AS&EC'S &arties to the transactions Modes of consu er finance &rocedure for granting
'er s of financing &ur!ose of raising finance (enefits of consu er finance
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&AR'IES 'O ')E 'RANSAC'ION
In A (i!artite Arrange ent A*borro+er$Consu er (*dealer Cu Financer
In A 'ri!artite Arrange ent A* Custo er$(orro+er (* ,ealer$Sellers C*financer- ay (e A (an. Or Non (an.ing Co !any*
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MO,ES OF CONSUMER FINANCE
)IRE &URC)ASE INS'A/MEN' S0S'EM O1ER,RAF'
CRE,I' /OANS
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)IRE &URC)ASE )ire !urchase eans a transaction +here goods are !urchased
and sold on the ter s that 2*!ay ent +ill be in install ent 3*!ossession of goods is given i ediately 4*o+nershi! re ains +ith sellers till the last install ent !aid by
buyer 5*the seller can re!ossess the good in case of any default
6*each install ent +ill be treaed as hire charges till the lastinstall ent
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RIGHTS OF HIRER 'he hiree -vendor* can not ter inate the hire !urchase agree ent
'he right to re!ossess the goods
'he hirer has a right of receiving a state ent
E"cess !ay ent ade by the hirer +ill be returned by the o+ner tohi
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installment system under hirepurchase
It ay be of t+o ty!es
2* Conditional sale
3* &ledge or hy!othecation
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Overdraft$de and loans
Under an overdraft interest is charged on the a ount actuallyutili7ed by individual custo er% overdraft facility is !rovided againstthe security of life insurance !olicies8 fi"ed de!osits8 govt% securities
etc%1) Loan against equitable mortgage of immovable property 9%
2) Loan against NSC/IVP/KVP
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4*L!"NS "#"INS$ LI%& INS'("NC& P!LICI&S In this loan is advanced either in for of de and loans or overdraft as :;< to =6