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Simple English definitions for legal terms
small-loan company
Read a random definition: New York
A quick definition of small-loan company:
A small-loan company is a type of finance company that helps people borrow money. They either give out loans themselves or buy loans from other companies that lend money directly to borrowers. Small-loan companies work with individuals, not big businesses. They are also called consumer finance companies because they help people with their personal finances.
A more thorough explanation:
A small-loan company is a type of finance company that deals directly with consumers in extending credit. They provide small loans to individuals who may not qualify for traditional bank loans. Small-loan companies may also purchase notes from other companies that make loans directly to borrowers.
- A company that provides short-term loans to individuals with poor credit scores.
- A company that purchases notes from a payday loan company.
These examples illustrate how small-loan companies provide credit to individuals who may not have access to traditional bank loans. They often charge higher interest rates to compensate for the increased risk of lending to individuals with poor credit scores.