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LSDefine
Simple English definitions for legal terms
consumer loan
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A quick definition of consumer loan:
A consumer loan is when someone borrows money from a bank or other lender for personal reasons, like buying a car or paying for a wedding. The borrower has to pay back the loan with interest over time. There are different types of consumer loans, like installment loans where the borrower pays back the loan in equal parts, or home equity loans where the borrower uses their home as collateral. It's important to read the loan agreement carefully and understand the terms before borrowing money.A more thorough explanation:
A consumer loan is a type of loan that is given to an individual for personal, family, household, or agricultural purposes. It is usually governed by truth-in-lending statutes and regulations. The borrower is required to pay back the loan amount with interest over a specified period.
Examples:
- John applied for a consumer loan to buy a new car.
- Mary took out a consumer loan to pay for her daughter's college tuition.
These examples illustrate how a consumer loan is used for personal or family purposes and must be paid back with interest over time.