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Consumer finance in the most basic sense of the word refers to any kind of lending to consumers. However, in the United States financial services industry, the term "consumer finance" often refers to a particular type of business, sub prime branch lending (that is lending to people with less than perfect credit). Examples of these companies include HSBC Finance, CIT, Citifinancial, and Wells Fargo Financial.

Consumer Finance in General

Consumer finance covers a wide range of activities, including loans from banks and indirect finance such as hire-purchase agreements, and loans by specialist retail finance companies.

At the most respectable end of the market, consumer finance is an integral part of retail banking and an important source of unsecured loans

However, in many countries some 'consumer finance' companies are little different from loan sharks, offering considerably higher interest rates than those available on other unsecured loans.

On another view, however, such companies are beneficial because they offer credit to sectors of society which are otherwise excluded from financial markets, and the credit offered is no worse than the alternative credit cards.

The term as used in the United States

The Consumer Finance industry (meaning branch based subprime lenders) mainly came to fruition in the middle of the twentieth century. Mortgage refinance company.