Both the volume and value of personal loans increased by double figures last year and lending activity is expected to intensify in 2022, according to the Banking and Payments Federation Ireland (BPFI).
The BPFI's Personal Loans Report shows that more than 140,000 personal loans worth €1.4bn were drawn down in 2021 -- annual increases of 12.2% and 13.5%, respectively -- while the average personal loan fell to €8,652.
Car loans accounted 45,000 pacts (+5.4%) worth €488m last year (+7.4%), but the average car loan dropped nearly 6% year-on-year from €11,135 to €10,474 in the fourth quarter.
Home improvement loans were the fastest-growing segment of the market in 2021, with volume rising 24.6% to 43,336 loans and volume up 20.4% to €462m, although the average value fell some 10.7% from €10,899 to €9,748.
Some 11,241 educational loans worth €58m were taken out last year, compared to 10,483 loans worth €59m in 2020, as the average education loan fell from €5,950 to €4,900 year-on-year in the fourth quarter.
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There was a balance of 43,766 loans worth €366m, up from 39,884 loans valued at €313m, as the average value of "other" loans fell 10% year-on-year in Q4, from €8,106 to €7,303.
Brian Hayes, CEO of the BPFI, said current loan volumes equate to 2,756 loans drawn down per week, 864 of which are for car or auto loans and 833 of which are for home improvements, as he commented on the release of the new data set.
"We plan to publish this data on a quarterly basis and expect to see some interesting trends emerging over time," he added.
"The Covid-19 restrictions had a substantial negative impact on lending activity especially in Q2 2020 but with improving consumer confidence, we expect demand for personal loans to increase in 2022."
Loan activity really ramped up in the fourth quarter when the number of personal loans drawn down rose 34.6% year-on-year to 39,803 while the value of personal loans taken out rose 20.1% to €344m.
Some 10,201 car loans (+10.4%) worth €116m (+3.9%) and 11,906 home improvement loans (+34.9%) valued at €116m (+20.6%) were drawn down in the final three months of 2021.
The BPFI reported last month that approximately 53,340 mortgages to the value of €13.4bn were approved in 2021, the highest level of mortgage activity since the recession.
(Pic: Getty Images)
