Wednesday, December 11, 2019

Four out of ten Germans take out loans

Woman hides her face behind a moneybox

In the period from June 2015 to July 2016, four out of ten Germans took out a loan. Borrowing is particularly common for financing cars or motorcycles. 

Differences in the subject of installment credit are also evident between women and men. Overall, borrowers were satisfied and considered taking out further loans in the following months.

Advance credit by far the most common type of loan

This is the result of a survey conducted by opinion research institute execuresearch on behalf of the online credit comparison portal creditend. In total, around 40 percent of the survey among more than 1,000 German citizens stated that they had borrowed between June 2015 and July 2016. Of these, 23 per cent were in installment loans, followed by a credit line (12 per cent), a real estate loan (6 per cent) or mortgage lending (also 6 per cent). Of the almost a quarter of respondents who had taken out installment loans, 20 percent took advantage of the favorable hour, or the historically low interest rates, particularly intensively. In the period from June 2015 to July 2016, they even took out several loans.

Borrowing is mainly for vehicles

At 41 percent, most consumers used the installment loan to finance a new or used car or a motorcycle. In second place came home with 36 percent durable goods such as computers, TVs, washing machines or refrigerators. 16 percent used the taken installment loan for the area of ‚Äč‚Äčliving, thus for a renovation, a move or for the furniture purchase. Ten percent took advantage of the currently very low interest rates and owed with a new loan one or even several loans in progress, so as to lower their interest costs. A lower interest burden also benefited the nine percent, who borrowed an installment loan to make up for their bad debts. At four percent, borrowing was used to finance training or further education. However, the Germans are not tempted to unrestrained spending by the low interest rates, as the study also shows. To finance celebrations, such as a wedding, a borrowing in this country is not common. For this purpose, just as for a vacation trip, only one percent of the respondents used their credit. According to their own statements, only one percent of the respondents also used a installment loan for their trade, ie for the purchase of operating resources or for business expansion.

Men take more credit than women

Men take more credit than women

From the respondents’ answers, the study authors identified the typical installment borrower in Germany: on average, he is 48 years old, married and has an average net household income of 2,950 euros per month. Respondents who had paid installment credit between June 2015 and July 2016 were 53 percent male and 47 percent female. Not only do men borrow more frequently than women, they also opt for higher amounts: the average loan amount was 10,567 euros for male borrowers and 7,964 euros for female borrowers. Overall, the average loan amount was 9,330 euros, with an average maturity of 35 months.

Borrowers are satisfied

The study also shows that 80 percent of surveyed borrowers can imagine borrowing between August 2016 and August 2017. So you were apparently satisfied with the settlement of the loan and the terms. This is especially true of respondents who have taken out their loans on the Internet: Robert K. Hayes, CEO and co-founder of creditend, explains: “Among online borrowers, this share is even higher. The advantages, which from their point of view an on-line graduation, are above all transparent conditions and a fast, uncomplicated handling. ”


Back To Top