How to tell the difference between personal, consumer and fast loans


Just by looking at their websites, we can see the different names banks use when they market their loans. But would we know the difference between a personal loan, a consumer loan and a fast loan? Here’s how to tell them apart.

It is possible for a loan to be a personal, consumer and fast loan at the same time. The concept of personal loan refers to the type of collateral that the customer offers the bank, while the concept of consumer credit refers to the purpose for which the loan will be used and the concept of fast loan refers to how the transaction is processed.

A personal loan relies solely on “personal” collateral as security — i.e., on your solvency and that of your guarantor, if you have one — regardless of how you are going to spend the money lent to you by the bank. Mortgage loans are backed by additional collateral.

Consumer loans, on the other hand, are mainly characterised by what you are going to spend the borrowed money on, regardless of the collateral held by the bank for repayment. They are commonly found under trade names such as “car loan” or “student loan”.

Consumer loans are regulated by Law 16/2011Abre en ventana nueva, which aims to provide special protection to consumers. Consumer loans are usually personal loans.

So are fast loans or credit. The defining feature of fast loans, which are not regulated by law, is the speed with which they are granted. Lenders simplify risk analysis procedures and this usually translates into higher costs for the customer. Fast loans are commonly marketed over the internet and through electronic devices, and are often referred to as “online”. They are also commonly known as pre-approved loans.

Finally, it is important for you to know that 

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 is often granted by firms which are not supervised by the Banco de España.


For more information, visit our Personal loans and consumer credit section.

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