Consumer Credit
The term consumer credit refers to different forms of credit agreements available to consumers which are provided by credit institutions, credit unions and retail credit firms.
These types of credit are:
a: Personal Loan, typical period of loan is 1-5 years. Longer terms are also available.
b: Hire Purchase, this where a consumer agrees to hire a product / goods from a finance company. At the end of the agreed period the consumer has the option to purchase the product / goods from the finance company provided that all the payments have been made over the agreed period. However, the consumer is not obliged to buy the products / goods.
c: Credit Sale Agreement, is when a consumer purchases a product / goods from a retailer with the aid of a loan provided by a finance company (the retailer acts as a credit intermediary in this case). The consumer owns the goods from day one and they cannot be repossessed if the consumer defaults on the loan repayments.
d: Conditional Sale Agreements, this is similar to a hire purchase agreement with one major difference. The consumer is obligated to purchase the product / goods once all the repayments under the agreement have been made.
e: Housing Loans, this is a loan to purchase a property secured by a mortgage.
The Consumer Credit Act 1995 and the European Communities (Consumer Credit) Regulations 2010 regulate all aspects of consumer credit supplied to consumers from credit institutions and credit intermediaries.
Hire purchase and Housing loans come under the Consumer Credit Act 1995, Personal Loans, credit sale and conditional sale agreements come under the European Communities (Consumer Credit) Regulations 2010. Also, housing loans, personal loans, credit sale and conditional sale agreements are subject to some of the provisions of the Consumer Protection Code (CPC).
Sums below €200 and above €75,000 are regulated by the Consumer Credit Act 1995 only. Credit agreements with sums between €200 – €75,000 and entered into since 11th June 2010 are governed by the European Communities (Consumer Credit) Regulations 2010, prior to this date the agreement is governed by Consumer Credit Act 1995.