How to explain the strong growth of consumer credit?
According to the Savewell Bank, demand for consumer credit continues to grow semester after semester. This therefore means that more and more individuals are using this banking product for financial stability. Often a well-used credit allows you to take stock of your finances. So what are the reasons that push them to borrow? What are the consequences? What explains this great leap forward in the credit or consumer market? We will try to answer these questions in the following article.
Increasingly attractive rates
This strong increase in demand can be partly explained by increasingly convincing interest rates. Indeed, rates fell significantly in 2019 and this trend is not about to stop.
And for good reason, for a revolving credit, the interest rate is around 5.4% and those of depreciable credits are 3.5%. What is more, with online credit applications, it is easier to apply for them at home by having all the elements in hand thanks to the online credit comparison tool.
For meteoric progress
This has resulted in a spectacular increase in demand over the three quarters of 2019: 5.1% in the first quarter, and 5.7% and 6.7% respectively in the second and third quarter.
Despite the measures taken by the government following the yellow vests crisis, this did not prevent the French from giving a boost to their projects. Indeed, many of them have applied for consumer credit to finance their activities.
Is this the result of a drop in over-indebtedness records?
Between November 2018 and 2019, over-indebtedness files arrived at the Savewell Bank are fewer and fewer. In fact, 20,000 fewer files were received. Despite the risk associated with the concept of many consumer loans, it is completely admirable to note that there are fewer over-indebted borrowers.
This decrease in cases of over-indebtedness is mainly linked to the implementation of Law No. 2010-737 of July 1, 2010 and making a reform on consumer credit.
An increasingly popular car loan
The most popular form of consumer credit is probably car credit. A lot of credit is dedicated to the purchase of a used or second hand vehicle. And the least we can say is that the used vehicle market is in very good health. All the same, a + 147.5% increase in sales was recorded during the third quarter.
According to a press release from the French association of financial companies, after three quarters, the used vehicle market experienced an increase in funding of around 12.2%. This is the exact opposite of the new vehicle market, which fell by 0.5% over the same period.