What term describes loans used for personal, family, or household purposes?

The term that describes loans used for personal, family, or household purposes is consumer credit. This classification is essential because it helps distinguish between the different types of credit based on their intended use. Consumer credit is focused specifically on loans that individuals take for personal use, such as buying a car, financing education, or utilizing credit cards for everyday expenses. This distinction is significant in the context of the Truth in Lending Act, which aims to protect consumers by ensuring they have clear information about the terms and costs associated with these types of credit. This regulation mandates disclosures that are critical for informing borrowers of their responsibilities and the terms under which they are borrowing. Understanding consumer credit is vital for anyone involved in lending or borrowing, as it outlines the protections and expectations for individuals engaging in personal finance.