About AIFUL Group

The structure of Unsecured Consumer Loans

The keywords in understanding the structure of unsecured consumer loans are “contract,” “credit,” and “credit management.”


Many consumer finance companies currently adopt a contract method called a “revolving contract.” This type of contract is characterized by the ability of the applicant to take out loans and repay them repeatedly within the credit limit, which is predetermined according to the applicant’s creditworthiness. The customer also has the option to make additional repayments by setting a minimum monthly payment. This type of contract offers a high level of convenience and enables flexibility in transactions according to the preferences of the users themselves.


The fundamental element of the consumer finance business is “risk pricing,” which means to set credit limits and interest rates according to the customer’s creditworthiness. Consumer finance companies are making efforts to reduce non-performing loans at an early stage by providing appropriate credit.

Credit by consumer finance companies includes “credit upon contract” at the time of a new credit application, and “credit monitoring” after the signing of the contract. In addition to obtaining the customer’s credit information by using a credit information organization, each company’s original scoring system (automated credit screening system) is the basis of its provision of appropriate credit. The scoring system, in particular, which is also said to form the know-how of the consumer finance business, is a credit database created by statistical classification and analysis of the vast amount of customer transaction data owned by a consumer finance company, which can immediately indicate credit judgment information such as the ability to lend or the credit limit.

Credit management

Consumer finance companies manage credit by classifying loan receivables into the following three types: ordinary receivables (normal receivables for which repayment is made as per the contract), managed receivables (receivables for which there is no payment by the repayment date), and uncollectible receivables (receivables for which no payment is made for a long period of time for some reason or receivables for which bankruptcy or debt consolidation is filed).

There are basically four methods to collect receivables: by telephone, in writing, door-to-door, and by legal procedures. AIFUL prohibits door-to-door collection as it has established a call center system.

Generally, initial repayment delays are mostly due to the payment date having been forgotten and seldom lead to serious delays. A majority of such cases can be easily solved by calling the customer by phone or sending a written notification. For customers who have become unable to repay due to various reasons, AIFUL reviews repayment terms, including extending payment dates and reducing the interest in some cases, and offers advice on family finance management while maintaining close communications such as through counseling.