Overview
A consumer discount company bond is the surety bond required of a lender licensed under a state consumer discount company act, a license type several states use for consumer installment lending. The bond guarantees that the company will follow that act, including its rate, fee, and disclosure rules and its handling of borrower payments.
State regulators set the required amount, often per licensed office, so the figure varies by state and by how many offices a company runs. Because the bond guarantees compliance, underwriting reviews the owners' credit and the company's financial strength.
It is a surety bond that protects borrowers and the state. A borrower or regulator harmed by a violation can claim against the bond, and the company reimburses the surety under the indemnity agreement.
Who needs this bond
Companies licensed as consumer discount companies in states that use that license type and require a bond as a condition of it.
Typical amount and term
Bond amount is set by the state's regulator, often per licensed office. Premium runs 1 to 3 percent of the bond amount for well-qualified lenders. Term is usually one to three years.
What this bond costs
Your premium is a small percentage of the bond amount, set by underwriting. The biggest drivers:
- The state-set bond amount, often per licensed office
- The owners' personal credit
- The company's financial statements and time in business
- The number of licensed offices
| Scenario | Bond amount | Estimated premium |
|---|---|---|
| Single-office lender, strong credit | $25,000 bond | around 1 to 2 percent per year |
| Multi-office lender | $50,000 bond | around 1.5 to 3 percent per year |
| Newer lender, limited history | $25,000 bond | rate is higher until a track record is built |
Figures are illustrative premium ranges, not quotes or statutory amounts. Your rate depends on the bond amount your obligee requires and your underwriting profile.
What you will need
- State of license and license or application number
- Two years of business financials
- Owner credit authorization
- Number of licensed offices
How to apply
- Send your state, license type, and the required bond amount
- Receive a per-state quote within one business day
- Sign and pay, then we file the bond with the regulator
How a surety bond differs from insurance
A consumer discount company bond is a surety guarantee that protects borrowers and the state, not the company. It is separate from insurance on the company's own losses. The bond backstops compliant lending, and the company repays the surety for any paid claim under the indemnity agreement.
Frequently asked questions
What is a consumer discount company?
In states with a consumer discount company act, it is a licensed consumer installment lender. The license carries a surety bond as a condition.
How is the bond amount set?
By the state's regulator, often per licensed office, so the required amount varies by state and by the number of offices.
Do I need a bond for each office?
Some states set the bond per licensed office. Tell us your state and office count and we will size the bond correctly.
What drives the premium?
Mainly the bond amount, the owners' credit, and the company's financial strength. The figures here are illustrative, not a quote.
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Reviewed by the Cornerstone Surety bond team. Last reviewed 2026-06-17.