The volume and value of personal loan drawdowns hit another record in 2024 as consumers borrowed to fund car purchases, home improvements and holidays against a backdrop of falling interest rates.
On Friday, Banking & Payments Federation Ireland (BPFI), the main lobbying body for the banking sector in the Republic, said non-mortgage, personal loan activity surged to the highest levels since 2020, when its data series began.
Consumers in the Republic drew down 229,423 personal loans in 2024, up 13 per cent on 2023. The value of those borrowings also climbed by more than 20 per cent to nearly €2.5 billion, the BPFI said.
In the fourth quarter of last year, the number of car or auto finance loans drawn down jumped by more than 29 per cent on the same three-month period in 2023.
It meant that more than 66,200 car loans were drawn down in 2024, valued at €856 million, an increase of almost 15 per cent in volume terms and more than 20 per cent in value.
[ Car and home improvement loans soared in third quarter of 2024Opens in new window ]
Home improvement loan volumes reached 60,322, an increase of 6.8 per cent compared to 2023, with values up 19.4 per cent to €754 million, the BPFI said.
Brian Hayes, chief executive of the BPFI, said the surge in personal borrowing last year indicates “strong household spending power and consumer confidence”.
He said: “These figures come as the Central Bank of Ireland reported that there was more than €13 billion in outstanding consumer credit at the end of March 2025, the highest level since February 2020.
“Within that, consumer credit with terms of over one and up to five years increased to more than €10 billion, the highest value since June 2010.”
According to the Central Bank of Ireland, demand for personal loans in the Republic is largely driven by the same factors as mortgage demand, namely the performance of the economy, the interest rate environment and consumer confidence among others.
While interest rates have risen from historic lows during the Covid-19 pandemic, Irish lenders passed on falling European Central Bank (ECB) rates to borrowers last year, slashing borrowing costs.
Consumer price inflation also continued to decline throughout most of last year, easing cost-of-living pressures on households.
“Looking more closely at key categories, each segment reached its highest volume and value in annual terms, with other loan activity (including education, holidays and special occasions such as weddings) more than doubling since 2020,” Mr Hayes said.
He added that it was also “encouraging” to see rising demand for green personal loans, with volumes up 21.4 per cent and values rising 22.5 per cent throughout 2024.
