Surge in car and home improvement loans in first quarter of 2023

BANKING & Payments Federation Ireland (BPFI) has published the BPFI Personal Loan Report for Q1 2023 showing a surge in car and home improvement loans.

Overall, the report shows a considerable jump in personal loans activity on the same time last year, with the value of personal loan drawdowns increasing by 25.2% year on year in Q1 2023 to €481 million, while the number of loans rose by 27.8% to 49,236. These are the highest values reached since the data series began in Q1 2020.

Looking at the various loan types:

A total of 15,167 car loans were drawn down in the first quarter of 2023 worth €187 million with the volume rising by 27.4% year on year and values rising by 39.6% over the same period. These were the highest volumes and values since the data series began in Q1 2020.

The number of home improvement loans rose by 28.7% year on year to 13,950 while the value rose by 17.2% to €147 million over the same period. These were also the highest levels of activity since Q1 2020.

The number of loans for education, holiday and special occasions such as weddings increased by 27.4% to 20,119 in Q1 2023 with the value increased by 17.9% to €146 million over the same period.

The value of green personal loans almost doubled to €19.7 million in Q1 2023, an increase of 94.5% year on year. The number of green loans jumped by 82.1% over the same period to 874.

The average green loan is relatively high at €22,486 in Q1 2023, compared with the average for all loans at €9,763.

Commenting on the report, Brian Hayes, Chief Executive, BPFI said: “Our latest report shows a considerable jump in personal lending in the first quarter of 2023 with growth in lending across all categories from car and home improvement loans to loans for other purposes such as holidays and special occasions. And while the average loan value fell overall by about €200 to €9,763, the lowest level since Q4 2021, the average car or auto finance loan rose by €1,073 to €11,678, likely reflecting rising car prices and growth in electric and plug-in hybrid vehicles.”