Consumer loans are a resource that can be used to finance the purchase of goods -such as furniture, a car, appliances, clothing, fashion accessories- or simply go on vacation.
In Spain, and following the trend of recovery of economic activity, there has been growth in the operations of this financial modality. The main reasons are the lowering of the delinquency ratios and the policy of the Bank to facilitate monetary liquidity with 0% interest rates. Since 2012, the granting of consumer credit has increased from 12,811 to a total of 25,356 million euros in 2016. In 2017, only 8,768 million euros were granted in these operations until April.
Regarding the repayment terms, in recent years there has been a stagnation of the loans to be repaid in one year, but those that have a term of between one and five years have increased exponentially and, finally, those of more than five. This is mainly due to the fact that it is decided to defer payment in several installments in order to make it easier to assume it.
However, an anomaly that occurs in Spain is the high average interest of consumer loans , of 7.85%, which makes it the country in the European Union where it is more expensive to hire a financial product of these characteristics. As an example, to make a comparison, the average of the Euro Zone is at 5.55% and in France it stands at 3.90%.
The main reason given by the lenders for the interest rates on consumer loans in Spain to be so high is that the risk premium is at its highest levels. Although this is true, Portugal and Greece have it at much higher levels and, by contrast, their average interests are clearly below, at 7.48% and 7.45%, respectively. On the other hand, the average interest rates for these operations in Spain are similar to those in 2007, when the official price of money in the Eurozone exceeded 3%.
Traditionally, these products have been offered, mainly, by conventional financial institutions (savings banks and banks), large stores and financial companies specialized in this type of operations. However, in the consumer credit market in Spain , new players are emerging, such as mobile phone companies. In some cases, these operations are closed to traditional customers of the company, while in others there are advantages such as not having to pay opening fees.
Everything seems to indicate that the next few years – and if the economy continues on this growth path – the hiring of these financial products will continue to grow. It is to be hoped that the greater competition and the growing continental economic integration will favor in the medium term a decrease in interest rates.
The best alternative to expensive consumer loans is the contracting of fast online credits , effective, technological and fast solutions to the traditional market. We invite you to consult all the available offer on our website and that you can save money if you have financing needs.