In Europe, credit has become a generalized method of financing. In Portugal, France and the United Kingdom, the use of consumer credit has increased in recent years, becoming a form of financing in its own right. Why? For what purposes? Our explanations.
Strong growth of consumer credit in Europe
Consumer credit is becoming widespread in Europe. While the UK, Germany and France appear mature markets, Southern European countries such as Spain, Portugal and Italy are developing strongly. This dynamism can be explained on the one hand by the greater budget constraints in these countries, and on the other by growth in growth since 2014.
A study published at the end of June 2018 by Yougov for Confier shows that 27% of Europeans currently refund a consumer credit and 57% have already subscribed one. 62% of the French would have already taken the step, occupying the second place behind the Portuguese and in front of the British. Denmark is the country where this solution is least common. Indeed, only 17% are currently paying back one. The Lasyer finance their projects themselves thanks to the savings they have made. 72% say they save money in the event of unforeseen circumstances. Unlike in Denmark, the countries of the South mainly turn to consumer credit. Nearly 40% of the Portuguese are currently repaying a loan of this type, compared to 28% in Spain and 23% in Italy.
In addition, 54% of Italians and 43% of Spaniards plan to use this solution to finance a project, which is well above the European average (37%).
Consumer credit: how to explain the massive use by individuals?
Several advantages are associated with this method of financing. First, it allows the subscriber to pay the property he wants to buy at one time. After having signed the offer, this one can return on its commitment, without reason, within 14 calendar days. Then, the borrower can at any time repay all or part of the remaining monthly payments. Beware, however, for consumer credits of more than 10 000 euros, the lender may request the payment of a prepayment compensation.
This type of credit now benefits from better supervision. In fact, each year before renewing the contract, the lending institution must consult the payment incident file (FICP) to check the creditworthiness of the borrower. Among the main disadvantages of consumer credit: interest rates often high, the bank can not vouch for the project.
Conso credit: uses that differ from country to country
The term consumer credit covers non-real estate loans contracted over a period of more than 3 months and whose amount is between 200 and 75,000 euros. This credit can be granted by a bank or financial institution. It is repayable over a maximum of 5 years, unless the amount is less than 3,000 euros (3 years). In France, this product is generally subscribed to finance the completion of work, the acquisition of a car on leasing or pay for higher education. Many also use it to cope with an exceptional expense or to make ends meet.
Nearly 4 out of 10 French people think of using consumer credit to finance their project. In detail, 47% of them use it to buy a car or a motorcycle. One in four French subscribes for this credit to finance improvement and decoration work in his home. Consumer credit is also used to finance household appliances. Finally, 22% consider it as a backup solution, to cope with unexpected expenses. The use of this type of credit could diversify in the future as 27% of French people would use it to pay for higher education.
However, the practices differ from one country to another. Nearly half of Germans and Britons take out a consumer credit to buy a new vehicle. A majority of Portuguese use it to work in their homes, buy appliances or high-tech products. Italians (31%) use it to finance exceptional events in life (marriage, birth). Finally, Italians (13%) and Spaniards (16%) even finance their holidays thanks to this credit.
If consumer credit attracts more and more, it is important to remain vigilant. Putting too many credits on your budget can lead to over-indebtedness. The use of this type of credit should not be taken lightly.
All our information is, by nature, generic. They do not take into account your personal situation and do not constitute in any way personalized recommendations for the realization of transactions and can not be assimilated to a financial investment advisory service, or any incentive to buy or sell instruments financial. The reader is solely responsible for the use of the information provided, without any recourse against the publisher company Cafedelabourse.com is possible. The responsibility of the publisher company Cafedelabourse.com will in no case be engaged in case of error, omission or inappropriate investment.