Money lending interest rates regulated

The Department of Finance is a crucial part of the government of the republic of Ireland. During the current year, the Financial Services Division of this sector is looking into the interest rates that government approved money lenders are charging their consumers.

According to the Central Bank of Moneylending and the Consumer Credit Act (1995), money lending is “the practice of providing credit to consumers on foot of a money lending agreement.” Usually, these credits are taken in the form of cash but can also be the purchase of goods on credit from a catalogue.

In general, money lenders make getting money quick and easy. They are especially beneficial for those with a higher chance of being denied the ability to take out loans due to bad credit history, low income or a variety of other financial reasons. Many people who are also uneducated or inexperienced in the financial sector may find themselves turning to this easy alternative.

These vendors are most beneficial to be used as a last resort option when you are in need of …

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Bank of England limits consumer lending & borrowing

Bank of England has voiced concerns over the increasing level of consumer credit in the UK, and has instituted various restrictions on banks regarding capital buffers, mortgage lending requirements and stress testing.

 

Levels of consumer debt have been rising rapidly, well beyond the rise in income, and bank lending has facilitated it’s growth. Since last April, personal lending has increased by 7% and credit card loans have risen by 9%.

 

The central bank expressed concerns in its most recent financial stability report that lends have grown used to benign economic conditions, and thus have loosened their lending standards. The Bank of England’s Financial Policy Committee warned that though current risks to the financial system remains low, banks should still remain watchful for shocks that could be caused by economic downturns.

 

It has asked banks to increase their capital by £11.4 billion over the next 18 months, thus having a greater buffer if an economic downturn causes a shock to occur, and …

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What is Consumer Credit?

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 …

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