Home Correctional service Increase in loans taken out for education and home improvement

Increase in loans taken out for education and home improvement

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There has been strong growth in the number and value of personal loans taken out by households despite the cost of living crisis and economic uncertainty due to the Russian invasion of Ukraine.

he number of personal loans taken out increased by a third in the first three months of the year, with an average amount around €10,000, according to the Federation of Banks and Payments.

There has been a surge in education loans, with speculation the closures may have prompted people to reassess their circumstances and seek more qualifications.

There has been an increase of more than 50% in the number of loans taken out for education purposes.

One in four loans is for home improvement.

Many of these are likely to be used to retrofit homes to make them more energy efficient, especially as energy costs have risen.

The Sustainable Energy Authority of Ireland grant program offers up to €25,000 to help cover the cost of a renovation.

Despite soaring costs, demand for renovations and renovations remains high, according to construction experts.

Many homeowners have decided to expand their homes rather than try to move due to the chronic shortage of properties to buy.

Banks said a total of 39,524 personal loans were drawn in the first three months of the year. These had a combined value of €384 million.

Figures do not include loans taken from credit unions and the likes of An Post.

Irish Banking and Payments Federation boss Brian Hayes said personal loan drawdown activity increased in volume by 36.4% compared to the same quarter a year earlier.

And the value of loans has increased by a third over the same period.

The average personal loan was €9,963, the highest level since the start of last year.

The number of home improvement loans increased 26.2% year-on-year to 10,837.

A total of 11,901 unsecured car loans were drawn in the first quarter of 2022, for a value of 134 million euros.

The number of student loans increased by 56.5% to 3,067.

Average loan size increased across most segments, with the average home improvement loan increasing by around €400 to €11,590.

The average car loan was almost €400 higher at €11,285.

Many car loans are likely to be used to purchase electric vehicles, especially since gasoline and diesel prices have risen so much.

Mr Hayes said it was remarkable that there were big increases in the number of home improvement loans and education loans.

“This largely reflects the fact that in the first quarter of 2021 the country was experiencing lockdown while 12 months later life has largely returned to normal, construction has resumed and education has returned to the classroom. “, he added. .

He said the first quarter of the year was a key period for new car sales.

“Interestingly, car loans increased by 10.2%, with the average car loan increasing by almost €400 to €11,285,” Hayes said.