Could someone please tell me what are considered "consumer loans" and what that means regarding other types of loans.

As of right now I understand that vehicle loans and home equity loans/lines are consumer, but the bank I work for doesn't consider mortgages a consumer loan. I've found documentation online that suggests Mortgages are Consumer Loans so I'm confused. I work for a Federal Savings Bank..

Could someone give me an overview of all types of consumer loans and what the differences are in regards to any Federal Laws.

  • 1
    I don't think there's any legal definition. – littleadv Jul 26 '16 at 16:43
  • A Federal Savings Bank's charter dictates that 35% of a bank's assets cannot be Consumer Loans.. there has to be some legal definition in order for that to hold true – DukeLuke Jul 26 '16 at 18:30
  • Usually the distinction is consumer loans versus commercial loans (loans to businesses). – keshlam Jul 28 '16 at 14:25

I went here: Consumer Loan Law.

It seems that a consumer loan is anything other than a business loan or mortgage. However, in California it seems to include a mortgage.

It's a bit weird to see that a HEL can be considered a consumer loan even if it is the primary or the only loan on a property. Getting a HEL can be a great low cost way to (re)finance a property as they tend to have low or no closing costs and lower interest rates.

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    I'm not sure home equity loan enjoy the same tax-advantaged status as mortgages.. ? – keshlam Jul 27 '16 at 0:03
  • good follow up. I don't believe they do, but I could be wrong. – DukeLuke Jul 27 '16 at 19:59

Here's a good definition of a consumer loan:

What is a Consumer Loan?

As@Pete B. pointed out, there are some states (California loves to be the oddball, doesn't it?) that treat some loans in a more unconventional manner, but the gist of it is that a consumer loan is normally unsecured, meaning there's no collateral or lien associated with it. A signature loan would be a good example of a consumer loan. Many times, loans made by non-banks (finance companies that loan for consumer purchases, for instance) would be considered to be consumer loans.

I hope this helps.

Good luck!

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