There are various types of consumer loans. Personal loans, auto loans, home equity loans, payday loans and car title loans are the most common consumer loans. Borrowing money personally from family or friends is not exactly a consumer loan, albeit the premise may be similar if interest is charged. Consumer loans may be secured or unsecured. They may have an extremely short repayment period, such as thirty days, or a reasonably long term of two to three years.
Some consumer loans are obviously better than others. Many people assess the pros and cons of consumer loans strictly based on the amount one can lend and the rate of interest. It is equally important to factor in the repayment term and the various criteria for approval. Consumer loans from pawnshops are easier to obtain compared to the complex process of applying for a home equity loan or line of credit. This does not imply loans from pawnshops are better than the propositions of the bank. Payday loans and car title loans have often been flagged as the worst consumer loans. They are deemed to be exploitative and to an extent abusive