---
title: "Consumer Loans: definition, formula, and thresholds"
description: "Consumer loans are credit extended to individuals for personal, household, and family purposes: credit cards, auto loans, and other personal loans. They carry higher yields but also higher and faster-moving loss rates than commercial credit."
canonical_url: https://www.bankregreports.com/glossary/consumer-loans/
source: BankRegReports
category: "Asset Quality"
units: "$"
schedule: "Schedule RC-C"
---

# Consumer Loans

> Consumer loans are credit extended to individuals for personal, household, and family purposes: credit cards, auto loans, and other personal loans. They carry higher yields but also higher and faster-moving loss rates than commercial credit.

## Formula

```
Consumer Loans = Credit Cards + Other Revolving Credit Plans + Automobile Loans + Other Consumer Loans
```

Schedule RC-C reports consumer credit by type. These loans are typically smaller, more numerous, and unsecured or thinly secured, so their losses react quickly to unemployment and household stress.

## Why it matters

Consumer lending diversifies revenue and earns high yields, but card and unsecured losses rise fast in a downturn and lead the credit cycle. A large consumer book (especially credit cards) makes earnings sensitive to the health of the household sector.

## How to read it

Read consumer loans as a share of the book and watch delinquency closely. Consumer credit losses move earlier and more sharply than commercial losses, so a rising consumer share raises both the yield and the cyclicality of the portfolio.

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| Small / secured | Strong | Limited or well-secured consumer exposure. |
| Moderate | Adequate | Typical consumer-lending share. |
| Card/unsecured-heavy | Watch | Higher-yield but faster-loss exposure. |
| Concentrated consumer | Concern | Earnings highly sensitive to household credit stress. |


## Worked example

A bank with $1.4 billion of loans and $250 million of consumer credit (half of it credit cards) earns strong yields in good times, but those card balances can see charge-offs spike above 4-5% in a recession, far faster than its commercial book.

## Questions

### What types of loans count as consumer loans?

Loans to individuals for household and personal use: credit cards and other revolving credit, automobile loans, and other personal installment loans. Residential mortgages are reported separately under real estate.

### Why do consumer loans have higher loss rates?

Consumer loans, especially credit cards, are often unsecured and tied to individual income and employment. Losses rise quickly when unemployment climbs, making them more cyclical and front-loaded than most commercial credit.

## Sources

- [FFIEC Call Report Schedule RC-C (Loans and Lease Financing Receivables)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)

## Related metrics

- [Total Loans & Leases](https://www.bankregreports.com/glossary/total-loans/): Total loans and leases is the gross amount a bank has lent out (commercial, real estate, consumer, and agricultural credit) before subtracting the allowance for credit losses. It is usually a bank's largest asset and its primary earning engine.
- [Commercial & Industrial Loans](https://www.bankregreports.com/glossary/ci-loans/): Commercial and industrial (C&I) loans are bank loans to businesses for purposes other than real estate: working capital lines, equipment and inventory financing, and term loans repaid from the company's operating cash flow. They are the core product of business banking.
- [Net Charge-Off Ratio](https://www.bankregreports.com/glossary/nco-ratio/): The Net Charge-Off ratio (annualized) measures loans actually written off as uncollectible (less subsequent recoveries) divided by average loans outstanding. It is the realized credit loss experience of the bank.
- [Past-Due Loans](https://www.bankregreports.com/glossary/past-due-loans/): Past-due loans are loans behind on their contractual payments, reported in 30-89 day and 90+ day buckets. The early (30-89 day) bucket is a leading indicator of credit problems before loans slip into nonaccrual.

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