“I need a loan”: Insights on how people
use loans and credit

In today’s world, most people have to borrow money and take out loans at some point in their lives. It may be a mortgage for a house, a car loan or a student loan. There are all kinds of reasons why people take out loans, but occasionally borrowing money becomes a problem and people struggle to repay their debts.

By analysing more than 3.8 MM active European consumer loans stored in our unique database, we are able to drill down the loan purpose and its performance. The analysis takes into consideration loans in arrears, default and restructured (performing loans were excluded).


Account Status = Arrears

  • Property and Debt consolidation loan purposes respectively with 5.83% and 3.39%, have the highest ratio
  • Surprisingly Tuition fees (2.94%) and Travel (2.87 %) are head-to-head in the arrears performance despite one being for long term investment (education) and the other for short term (holidays)

Account Status = Default

  • The highest concentration of defaulted loans is shown within the Appliance/Furniture loan sector with a ratio of 1.43%
  • Borrowing money for living expenses, often an indicator of short term financial difficulties also features with a ratio of 0.97%
  • Despite featuring in arrears, Tuition Fees (0.04%) and Travel (0.05%) display the lowest default ratio

Account Status = Restructured

  • Other than for property loans (1.50%), fewer than 1 in 200 loans are typically restructured

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