Question

We discussed several types of Finance Companies, choose one type and describe its business operations.

Major Types of Finance Companies

Sales finance institutions
Personal credit institutions

Business credit institutions

Answer 1

Personal Credit Institutions establishments primarily engaged in providing loans to individuals. Also included in this industry are establishments primarily engaged in financing retail sales made on the installment plan and financing automobile loans for individuals. As the American economy has become more consumers oriented, many options that allow consumers easier access to products have been created. Most of these fall under the personal finance industry.

Primary business operations of Personal Credit institution are to provide financing to individual person for the purpose of their basic requirements. It is a typical core banking business operation where banks lends money to their retail customer for Personal loan, car Loan, Credit Card, Consumer goods loan etc.

Here are an example of Personal Credit Institution company HSBC Finance.

HSBC Finance

HSBC Finance Corporation is a financial services company and a member of the British HSBC Group. It is the sixth-largest issuer of MasterCard and Visa credit cards in the United States. HSBC Finance Corporation was formed from the legal entity that had been known as Household International, and is now expanding its consumer finance model via the HSBC Group to Brazil, India, Argentina and elsewhere.

HSBC Finance Corporation’s subsidiaries primarily provide real estate secured loans, auto finance loans, MasterCard and Visa credit card loans, private label credit cards, personal non-credit card loans and specialty insurance products to middle-market consumers.

HSBC Operations, Services and Technology provides essential operational services, IT and technical support to help HSBC function effectively and improve our customer service.

Personal credit business of HSBC work with retail segments which provide loan for Personal household expense, Car loan, Home loan, Credit card and consumer goods loan.

Personal Credit financing are a strategy to target individual people who need money for short period for their day to day need. Like if any individual need personal loan, Existing HSBC current account customers could receive the money instantly once the application has been approved and the loan agreement has been signed. Non-HSBC current account customers could receive the money into a nominated account 3 working days after the signed loan agreement is received. As an HSBC current account customer, you could get an instant credit decision. Non-HSBC current account customers should be contacted with a credit decision in 2-5 working days.

Similarly, when an individual need a car loan, HSBC offer a wide range of car loan in all the market at affordable interest rate which help you to increase your purchasing power and life made simpler. You may need to take out finance to spread the cost of buying a car over a number of years and there are a number of options available on how to do this. Whatever you choose it is important to ensure you are comfortable with the interest rates, number of payments and the amount repayable, including any charges. Our lowest ever Personal Loan rate is available to existing and new customers for loans between £7,000 and £15,000.

Overall if we talk about overall their business operation in personal credit market globally than it is something like close to $20000 million.