Personal loan drawdowns climb by almost 14%

The number of car or auto finance loans rose by 9.7% year-on-year to 22,091.

The total value of personal loans drawn down during the second quarter of this year rose by nearly 14% to €857m driven by a surge in home improvement loans, new data from the Banking and Payments Federation, Ireland (BPFI) shows.

Between July and September, the number of personal loan drawdowns was up 9.3% to 77,556 while the combined value of these loans rose 13.7% to €857m which the BPFI said was the highest quarterly value since the data series began in 2020.

The average personal loan value rose by €426 year-on-year to €11,047.

While there was increased activity across all loan categories, home improvement lending reached record quarterly levels. There were 19,852 home improvement loans drawn down during the quarter, an increase of 11.9%, which were worth €262m up 15.1%.

The average loan size was €13,189.

Loan activity during the quarter increased across every category.

The number of car or auto finance loans rose by 9.7% year-on-year to 22,091 while the value of loans increased by 13.1% to €294m. The average car loan value reached €13,305.

In the “other loans” category — which includes loans for education, holidays and special occasions such as weddings — there were 35,613 loans drawn down, up 7.6%, worth €301m, up 13%.

The green loan category saw the most significant increase year-on-year with the volume of loans up 61.5% to 2,641 worth a combined €59.8m. The average size of the loan was €22,655.

Green loans include lending for both electric vehicles and home energy improvements. Chief executive of the BPFI Brian Hayes said “growth in this segment comes against a backdrop of expanded home energy upgrade supports, including new measures launched last month”.

Over the 12 months to the end of June, there were 288,412 personal loans drawn down with a total value exceeding €3.1bn.