Low rates boost consumer credit

The consumer credit market remains buoyant, according to several brokers. In December 2017, in France, the volume of loans granted increased by 5.9% year-on-year. The French are increasingly using consumer credit. This is due to lower rates and attractive offers regularly offered by the institutions.

Offers at 1% over one year

Offers at 1% over one year

For very short durations (over 12 months), 1% rates became frequent. Finally, borrow 10,000 euros over 12 months at a rate of 1% is to pay 54 euros interest only, for monthly repayment of 838 euros. Over two years, the monthly payments are less heavy, to 427 euros. However, in this case, it is no longer possible to benefit from the 1% call rates. The average market rate is 2.5% for a total cost of credit of 259 euros.

With such conditions, it may be interesting to take out this type of consumer credit to deal with unforeseen expenses or a need for one-off cash rather than tap into savings. In addition, when the desired amount is around 10,000 euros, borrowers can often take out an unallocated loan to use the amount granted as they see fit.

The consumer credit market is doing well

The consumer credit market is doing well

Several experts point to the dynamism of the consumer credit market. In 2017, some brokers received more than 300,000 consumer credit applications. This increase is mainly driven by amortising loans (+6.2%) and leases (+33.1%) while the outstanding amount of revolving loans decreases.

The average age of the borrower is almost 40 years old. However, the borrower of a credit work is older, at 44 years on average, while the borrower of a car loan is a little younger (38 years).

Thus, in 2018, the consumer credit market still benefits from a low interest rate policy by lenders. This situation is ideal for the middle classes who do not wish to start saving. Even if the rates remain attractive, it is advisable to remain vigilant and wait to have a specific project before going into debt over a few years. The borrowers who have a concrete project have, them, all interest to make play the competition.

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