The value of personal loans drawn down from Irish banks surged 11.2 per cent in value on the year in the third quarter this year, driven by consumers splashing out on holidays, special occasions such as weddings and education, as the economy continued to recover from the worst of the pandemic.
In total, 47,094 personal loans were drawn down during the quarter, valued at €442 million, representing an increase of 12.1 per cent in volume and 11.2 per cent in value year-on-year, according to Banking & Payments Federation Ireland (BPFI).
The fastest growing segment was in the so-called other loans category, which includes loans for education, holidays and special occasions such as weddings, where the value of loans rose by almost 22 per cent to €166 million, according to the data. The average loan in this category was €7,414.
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The value of loans for home improvements rose by 11.9 per cent to €140 million on the year, while new car and auto finance facilities were flat at €135 million.
“Today’s report shows continued growth in personal loan drawdowns with the volume and value rising in year-on-year terms for the sixth successive quarter, and with the highest volume and values reached since BPFI began collecting this data in [the first quarter of] 2020,” said Brian Hayes, chief executive of BPFI.
The increase in drawdowns comes even as households are grappling with the cost-of-living crisis, with Irish inflation running at 8.2 per cent in September at the end of the quarter under review in the latest personal loans report.
The overall figures were compiled from data provided by AIB, Bank of Ireland, Permanent TSB, Avant Money and KBC Bank Ireland. However, KBC stopped taking applications for new loans in mid-July as it continued with its plans to retreat from the Irish market.
