--- path: /learn/consumer-credit/ title: "Consumer credit: how it works and how apps offer it" description: Learn what consumer credit is, the difference between revolving and installment credit, who can lend, and how wallets and fintech apps offer loans through licensed lenders. publishDate: 2026-10-30 label: Enterprise contactInterest: credit timeToRead: 5 faq: - question: What counts as consumer credit? answer: Consumer credit is borrowing by individuals for personal, family or household purposes. It includes revolving credit, such as credit cards, and nonrevolving credit, such as auto, student and personal installment loans. Mortgages are usually tracked separately. - question: Can a wallet or fintech app offer loans without being a lender? answer: Yes, by partnering with a licensed lender. The lender underwrites the loans, provides or arranges the capital, and handles regulatory obligations, while the app provides the customer relationship and distribution. Licensing rules vary by country and state. - question: Are stablecoin loans regulated as consumer credit? answer: The form of money does not by itself change how a loan is regulated. A consumer loan disbursed or repaid in stablecoins is generally still subject to the lending, disclosure and collection rules that apply in the borrower's jurisdiction. seoTitle: "Consumer credit: types, rules and embedded lending" socialTitle: Consumer credit, explained authors: Tempo locale: en canonical: https://tempo.xyz/learn/consumer-credit/ --- # Consumer credit: how it works and how apps offer it _Consumer credit is money people borrow for personal use, from credit cards to installment loans. More of it now reaches people through apps and wallets that partner with licensed lenders. This guide explains the main types, who can lend and how stablecoins can carry disbursement and repayment._ Consumer credit lets people spread the cost of a purchase or cover expenses until their next income arrives. In the US, the Federal Reserve reports it monthly in its [G.19 consumer credit release](https://www.federalreserve.gov/releases/g19/current/default.htm), split into revolving and nonrevolving credit. ## Revolving and installment credit |Type|How it works|Examples| |-|-|-| |Revolving|A credit limit the borrower draws on, repays and reuses|Credit cards, personal lines of credit| |Installment (nonrevolving)|A fixed amount repaid on a schedule|Personal, auto and student loans, buy now, pay later| Most consumer credit is [unsecured](/learn/unsecured-credit/). Lenders rely on credit history, income and repayment behavior instead of collateral. ## Who can lend Consumer lending is regulated. Lenders generally need a license or a bank charter in the markets they serve, and they must disclose the cost of credit. In the US, Regulation Z, which implements the [Truth in Lending Act](https://www.consumerfinance.gov/rules-policy/regulations/1026/), sets disclosure rules for many consumer loans. Other countries have their own rules on licensing, pricing, disclosures and collections. That is why most apps that offer loans do so through a partner. The app owns the customer relationship. A licensed lender underwrites the loans, provides or arranges capital and takes the credit risk. ## Credit inside a wallet Many people who earn a living or run a small business have thin or no formal credit records, so conventional scoring leaves them out. Lenders that use alternative data, such as wallet or payment activity, can assess more of these borrowers. [Tala's partnership with the El Dorado wallet](https://tala.co/blog/2026/10/20/tala-brings-embedded-credit-to-el-dorado-digital-wallet-giving-customers-access-to-funds-in-seconds/) is one example. Eligible wallet customers in Bolivia will see a pre-qualified offer, choose an amount and repayment date, and receive stablecoins in their wallet without pledging crypto as collateral. Tala underwrites the loans and provides the capital. See [embedded lending](/learn/embedded-lending/) for how these partnerships are typically structured. ## What stablecoins change Stablecoins can carry the disbursement and the repayment. For borrowers who already hold digital dollars, that means funds arrive in the wallet they use, at any hour, and repaying is a transfer from the same balance. For lenders, onchain records make disbursements and repayments easier to reconcile. The credit itself works the same way. Underwriting, pricing, disclosures, collections and local licensing still apply. Stablecoin settlement covers the onchain leg; cash-out to a bank account or local currency depends on the wallet's providers. ## FAQ ### What counts as consumer credit? Consumer credit is borrowing by individuals for personal, family or household purposes. It includes revolving credit, such as credit cards, and nonrevolving credit, such as auto, student and personal installment loans. Mortgages are usually tracked separately. ### Can a wallet or fintech app offer loans without being a lender? Yes, by partnering with a licensed lender. The lender underwrites the loans, provides or arranges the capital, and handles regulatory obligations, while the app provides the customer relationship and distribution. Licensing rules vary by country and state. ### Are stablecoin loans regulated as consumer credit? The form of money does not by itself change how a loan is regulated. A consumer loan disbursed or repaid in stablecoins is generally still subject to the lending, disclosure and collection rules that apply in the borrower's jurisdiction. ## Explore credit on Tempo Stablecoins let credit move like a payment: funded, drawn and repaid at any hour, with each transfer tied to its loan. If you run a wallet, neobank or consumer lending business, [get in touch](/contact/?interest=credit&source_article=consumer-credit&cta_location=article_footer) to see how that works on Tempo. --- ## Site links - [Tempo home](/) - [Privacy policy](/privacy-policy/) - [LinkedIn](https://www.linkedin.com/company/tempo) - [X](https://x.com/tempo) - [YouTube](https://www.youtube.com/@tempo) ### Products - [Earn](/earn/) - [Routes](/routes/) - [Zones](/zones/) ### Solutions - [Agentic payments](/solutions/agentic-payments/) - [Credit](/solutions/credit/) - [Cross-border payments](/solutions/cross-border-payments/) - [Institutional settlement](/solutions/institutional-settlement/) - [Stablecoin accounts](/solutions/stablecoin-accounts/) - [Tokenized deposits](/solutions/tokenized-deposits/) ### Developers - [Documentation](/developers) - [Tempo Explorer](https://explore.tempo.xyz/) - [Tempo API](/developers/docs/api/) - [Performance](/developers/performance) - [Status](https://status.tempo.xyz/) - [GitHub](https://github.com/tempoxyz) ### Resources - [Blog](/blog/) - [Customers](/customer-stories/) - [Learn](/learn/) - [OUSD](/ousd/) - [Partners](/partners/) - [Reports](/reports/) - [Stablecoin Advisory](/stablecoin-advisory/) ### Company - [About](/about/) - [Careers](/careers/) - [Brand kit](/brand/) - [FAQ](/faq/)