Irish consumers borrow record €3bn in personal loans in just one year

Irish consumers collectively borrowed over €3 billion in personal loans in the past year.

Banking and Payments Federation (BPFI) figures show almost 282,000 personal loans were drawn down in the 12 months to the end of March.

It's a record amount, with the money being used to buy cars, make home improvements and pay for weddings among other things.

Some 69,604 personal loans with a total value of €788 million were drawn down in the three months to the end of March, up 14.5 per cent and 15.3 per cent in number and value, respectively, from the same period last year.

It meant that, on a rolling annual basis, a record 281,814 personal loans were drawn down in the 12 months to the end of March. The total value of loans drawn down over that period exceeded €3 billion for the first time, the BPFI said.

Ali Ugur, the banking lobby group’s chief economist, said the jump in borrowing activity was broad-based across all loan categories.

A total of 22,366 car loans with a value of €296 million were drawn down in the first quarter, up 14.1 per cent and 14.4 per cent in volume and value terms. These were the “highest levels on record” since the BPFI began publishing the data in 2020, Ugur said.

The number of home improvement loans increased by 12.8 per cent to 17,334, while the value of those loans was up by 15.4 per cent year on year to €229 million, according to the BPFI figures.

A total of 29,905 loans were drawn down for other purposes – including holidays, weddings and education – up 15.7 per cent from the first quarter of last year and up 16.7 per cent in value terms to €263 million.

Separately, AIB has urged customers to be vigilant after noticing a 59 per cent spike in payment fraud attempts in July compared with recent months.