Affordable And Safe Personal Consumer Installment Loans Are Back In Vogue

With the personal credit market in turmoil due to the mortgage meltdown, traditional installment loans-offered through "Main Street" consumer finance offices-have come back in vogue as the safe, affordable and disciplined loan option for cons

Chris McKinley, President and CEO of Greencap Financial, reported to North Carolina's Lending Association on March 25, 2011, that young borrowers are once again discovering the benefits of traditional installment loans, available in most towns and cities in the United States.

With the personal credit market in turmoil due to the mortgage meltdown, traditional installment loans-offered through "Main Street" consumer finance offices-have come back in vogue as the safe, affordable and disciplined loan option for consumers.

A renewed respect for traditional financial values; saving money, spending wisely, and borrowing responsibly, is leading the way for consumers to manage their personal finances in a more responsible and disciplined manner. A key driver for meeting the need to borrowing responsibly is the traditional Main Street credit option-the consumer installment loan.

While older generations have been familiar with the many benefits that the traditional installment loan offers, such as fixed payments, fixed interest, and disciplined debt reduction, many younger generation consumers are just now discovering how important the traditional installment loan can be to responsible borrowing.

"Many of our younger consumers have never experienced the installment loan process through a local branch office because of the flood of easy credit options over the past 10 years. This younger generation is just now discovering the benefits of utilizing installment loans for credit needs and learning how it can help them effectively manage their debt in a very responsible way."
-Chris McKinley, President and CEO of Green Cap Financial, a five branch consumer loan company headquartered in Burlington, North Carolina

In the report issued last week, Chris McKinley stated: "We are seeing a generational growth in borrowers for traditional consumer loans. What I mean by that is that we are seeing younger borrowers come in-some even referred by their parents or grandparents-who know and understand benefits of this type of loan product.

"These younger customers are eighteen to thirty years old and are trying to establish credit for the first time, or attempting to reestablish credit with a more responsible and disciplined loan. Some are trying to get their first car, or get help with school, while others are consolidating bills."

There is one specific aspect of this loan product that makes it an important option for responsible borrowing. As McKinley explained, the traditional installment loan is "underwritten the old fashioned way with one-on-one interaction, payment budgeting, and the creation of a personal relationship. Information is verified and loan terms are structured to ensure the borrower's success."

McKinley concluded: "A successful experience for the consumer is the only way we succeed as a business. When the consumer achieves their goals, we achieve ours." -Chris McKinley

Success for the borrower is understood by many to mean a loan that can easily be paid back and that does not create financial distress. In testimony this month before the Subcommittee on Financial Institutions and Consumer Credit in Washington DC, Chris Stinebert, President and CEO of The American Financial Services Association (AFSA), further pointed out the many features of the traditional installment loan and the benefits for consumers.

"Our loan products meet the standards of the Center for Financial Services Innovation's definitional benchmarks for high-quality credit. They are marketed transparently. They are affordable, because our members work with customers to determine their ability to repay the loan. They are structured to support repayment, with amortization schedules. And finally, our members report their customers' repayment performance to the credit bureaus so that good payment behavior is rewarded by a higher credit score."
-Chris Stinebert, President and CEO, the American Financial Services Association

"What is happening with young people under thirty is that they have had numerous easy credit options available to them that did not require budget review, proof of ability to pay or any responsible precautions. Young people were getting themselves in trouble financially before they even knew what was at risk for their future and their potential credit.

"While some of the loan options that were available to young people provided ease and convenience, these products are often more appropriate for experienced and established consumers.

"The traditional installment loan is perfect for young people for many reasons. The loans are simple and straightforward with fixed payments, based on their actual budget. It's an excellent product for borrowers who are less experienced or who want the discipline and 'high touch' interaction that is the foundation of consumer installment loans."
-Chris McKinley, President & CEO, Greencap Financial

As consumers embrace a renewed appreciation for traditional financial values, the consumer installment loan will continue to move into vogue. Long a staple of "Main Street" credit offered in local loan offices in cities and towns throughout the country, consumer installment lending will play a vital role in both protecting and benefiting consumers when addressing their credit needs.

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