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Personal Loans - Ireland - January 2017

"After a challenging period during and immediately following the recession, economic recovery and a significant upturn in consumer confidence have brought some upward momentum into the loans market in Ireland. It remains to be seen, however, how the UK's departure from the EU and the shift in policy from the US will impact upon the Irish economies, with any change inevitably impacting upon the loans market."

– Brian O’Connor, Senior Consumer Analyst

This report covers the following areas:

  • Circumstances right for non-mainstream lenders to gain foothold
  • One consequence of the downturn may be more responsible borrowing
  • Danger that lending criteria are excluding low earners from market

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Table of contents

  1. Overview

    • What you need to know
      • Issues covered in this Report
        • Definitions
        • Executive Summary

            • The Market
              • Figure 1: Outstanding loans to households, consumer credit and other loans, IoI, NI and RoI, 2012-22
            • Forecast
              • Figure 2: Indexed value of outstanding consumer credit and other loans, actual, estimated, forecast and projected, IoI, NI and RoI, 2012-22
            • Market factors
              • Uncertainty due to Brexit hanging over both economies
                • Consumer confidence not as buoyant as in recent years
                  • More than a quarter of consumers describe own finances as 'Healthy'
                    • NI consumers benefiting from cheaper personal loans
                      • Competitive Strategies
                        • The Consumer
                          • 16% of RoI and 13% of NI consumers hold a personal loan
                            • Figure 3: Types of loan/credit products that consumers currently owe money on, NI and RoI, November 2016
                          • Majority of loans held by Irish consumers relatively low value
                            • Figure 4: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), NI and RoI, November 2016
                          • A new car/vehicle is the most common reason to borrow
                            • Figure 5: The main reason why consumers took out their most recent loan, NI and RoI, November 2016
                          • Sensible, practical reasons dominate future borrowing intent
                            • Figure 6: Whether consumers would take out a loan in the future for selected purposes, NI and RoI, November 2016
                          • What we think
                          • Issues and Insights

                            • Circumstances right for non-mainstream lenders to gain foothold
                              • The facts
                                • The implications
                                  • One consequence of the downturn may be more responsible borrowing
                                    • The facts
                                      • The implications
                                        • Danger that lending criteria are excluding low earners from market
                                          • The facts
                                            • The implications
                                            • The Market – What You Need to Know

                                              • Uncertainty due to Brexit hanging over both economies
                                                • Consumer confidence not as buoyant as in recent years
                                                  • More than a quarter of consumers describe own finances as 'Healthy'
                                                    • NI consumers benefiting from cheaper personal loans
                                                    • Market Size and Forecast

                                                        • Outstanding loans down almost 40% between 2012 and 2016
                                                          • Figure 7: Outstanding loans to households, consumer credit and other loans, IoI, NI and RoI, 2012-22
                                                        • No expectation of imminent return to pre-recession highs
                                                          • Figure 8: Indexed value of outstanding consumer credit and other loans, actual, estimated, forecast and projected, IoI, NI and RoI, 2012-22
                                                      • Market Drivers

                                                        • Some uncertainty over economic outlook for NI due to Brexit
                                                          • Figure 9: Economic growth, forecast and projected, NI and UK, 2016-18
                                                        • Slowdown in RoI economic growth underway amid uncertainty
                                                          • Figure 10: Key economic indicators, annual % change, RoI, 2016 and 2017
                                                        • NI consumer confidence down slightly after EU referendum
                                                          • Figure 11: Indexed consumer confidence, NI, September 2008-September 2016
                                                        • RoI confidence ends 2016 on 22-month low
                                                          • Figure 12: Consumer sentiment index, RoI, October 2015-December 2016
                                                        • Strong improvement in how RoI consumers rate personal finances
                                                          • Figure 13: How consumers rate their current financial situation, NI and RoI, November 2016
                                                          • Figure 14: Consumers who rate their current financial situation as being "healthy", NI and RoI, July 2013-November 2016
                                                        • Cost of personal loans down significantly for NI consumers
                                                          • Figure 15: Personal loan rates, various providers, NI, January 2017
                                                        • RoI consumers paying far more for loans, with less competition between providers
                                                          • Figure 16: Personal loan rates, various providers, RoI, January 2017
                                                        • P2P lending offering consumers an alternative to traditional lenders
                                                          • Increasing online and social media usage to impact loan application
                                                            • Figure 17: Agreement that social media/network sites are a good source of brand/company information, RoI and NI, April 2016
                                                        • Companies and Brands – What You Need to Know

                                                          • First Direct boosts personal loan limit to £50,000
                                                            • Sainsbury’s offers UK’s cheapest personal loan rate
                                                              • Government launches It Makes Sense loan
                                                                • Permanent TSB launches online personal loan platform
                                                                • Competitive Strategies

                                                                  • First Direct increases borrowing limit to £50,000
                                                                    • Sainsbury’s offers UK’s cheapest personal loan rate
                                                                      • Zopa.com moves into banking
                                                                        • New entrants shake up the personal loans market
                                                                          • The Make it Sense loan is now available in credit unions across IoI
                                                                            • Banks entice existing customers with incentives
                                                                              • Permanent TSB launches online personal loan approval service
                                                                              • The Consumer – What You Need to Know

                                                                                • 16% of RoI and 13% of NI consumers hold a personal loan
                                                                                  • Majority of loans held by Irish consumers relatively low value
                                                                                    • A new car/vehicle is the most common reason to borrow
                                                                                      • Sensible, practical reasons dominate future borrowing intent
                                                                                      • The Consumer – Ownership of Credit and Loan Products

                                                                                          • Personal loans the second most widely held credit product in Ireland
                                                                                              • Figure 18: Types of loan/credit products that consumers currently owe money on, NI and RoI, November 2016
                                                                                            • Personal loan ownership highest among 25-54-year-olds
                                                                                              • Figure 19: Ownership of personal loan (eg from a bank), by age, NI and RoI, November 2016
                                                                                            • Loan ownership linked to social class and income
                                                                                              • Figure 20: Ownership of personal loan (e.g. from a bank), by social class, NI and RoI, November 2016
                                                                                            • Loan ownership highest among consumers in employment
                                                                                              • Figure 21: Ownership of personal loan (e.g. from a bank), by work status, NI and RoI, November 2016
                                                                                          • The Consumer – Value of Loans and Credit Products

                                                                                              • Most loans valued at less than £5,000 (NI) or €5,600 (RoI)
                                                                                                  • Figure 22: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), NI and RoI, November 2016
                                                                                                • Men tend to owe higher amounts on loans/credit products
                                                                                                    • Figure 23: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by gender, RoI, November 2016
                                                                                                  • Tendency for amount owed on loans to increase with age
                                                                                                  • The Consumer – Reasons for Most Recent Loan

                                                                                                      • Loans mostly used to finance major purchase or big expense
                                                                                                        • Figure 24: The main reason why consumers took out their most recent loan, NI and RoI, November 2016
                                                                                                      • A third of RoI and a quarter of NI consumers borrowed to buy new car
                                                                                                        • Men, over-55s and high earners most likely to borrow for car purchase
                                                                                                          • Figure 25: Consumers who took out their most recent loan in order to pay for a new car/vehicle, by age and gender, RoI, November 2016
                                                                                                          • Figure 26: Consumers who took out their most recent loan in order to pay for a new car/vehicle, by income, RoI, November 2016
                                                                                                        • One-off payments and big-ticket purchases common reasons for loans
                                                                                                          • Around one in eight consumers borrowed to make ends meet…
                                                                                                            • ...while 10% in NI, 6% in RoI borrowed to consolidate debts
                                                                                                              • Consumers have largely sensible attitudes towards loans and borrowing
                                                                                                                • Figure 27: Consumers who took out their most recent loan in order to pay for holidays, special occasions or presents/celebrations, NI and RoI, November 2016
                                                                                                            • The Consumer – Reasons for Future Borrowing

                                                                                                                • Willingness to borrow highest for sensible, practical reasons
                                                                                                                  • Figure 28: Whether consumers would take out a loan in the future for selected purposes, NI and RoI, November 2016
                                                                                                                • Willingness to borrow for a new car consistent across all consumers
                                                                                                                  • Figure 29: Consumers who would take out a loan in the future to pay for a new car/vehicle, by gender and age, NI and RoI, November 2016
                                                                                                                • Women and high earners most open to borrowing to improve home
                                                                                                                  • Figure 30: Consumers who would take out a loan in the future to pay for home improvement, by gender and gross annual household income, NI and RoI, November 2016
                                                                                                                • RoI consumers far more open to borrowing for medical expenses
                                                                                                                  • Figure 31: Whether consumers would take out a loan in the future for medical expenses, NI and RoI, November 2016
                                                                                                                • Two thirds of 35-44s in RoI would borrow for children's education…
                                                                                                                  • Figure 32: Consumers who would take out a loan in the future to pay for child/children's education, by gender and age, NI and RoI, November 2016
                                                                                                                • ...while RoI women aged 35-44 would borrow for own education
                                                                                                                  • Figure 33: Consumers who would take out a loan in the future to pay for education expenses, by gender and age, NI and RoI, November 2016
                                                                                                                • Borrowing to make large purchase deemed reasonable by all ages
                                                                                                                  • Figure 34: Consumers who would take out a loan in the future to pay for a large purchase (household appliance, new furniture, new boiler etc), by gender and age, NI and RoI, November 2016
                                                                                                                • Sizeable minority would borrow to help out a family member
                                                                                                                  • Figure 35: Consumers who would take out a loan in the future to help a family member with debt, NI and RoI, November 2016
                                                                                                                • Only a third would borrow to consolidate existing debts
                                                                                                                  • Figure 36: Consumers who would take out a loan in the future to consolidate their debts/pay off other credit products, by work status, NI and RoI, November 2016
                                                                                                                • More than a quarter would take out a loan to make ends meet
                                                                                                                  • Figure 37: Consumers who would take out a loan in the future to help make ends meet, by gross annual household income, NI and RoI, November 2016
                                                                                                                • Sizeable minorities would borrow for leisure or lifestyle reasons
                                                                                                                  • Figure 38: Consumers who would take out a loan in the future to pay for a special occasion (eg wedding), by gender, NI and RoI, November 2016
                                                                                                                  • Figure 39: Consumers who would take out a loan in the future to pay for a holiday, by gender and age, NI and RoI, November 2016
                                                                                                                  • Figure 40: Consumers who would take out a loan in the future to pay for Christmas or birthday presents/celebrations, NI and RoI, November 2016
                                                                                                              • Appendix – Data Sources, Abbreviations and

                                                                                                                • Supporting Information

                                                                                                                  • Data sources
                                                                                                                    • Abbreviations
                                                                                                                    • Appendix – The Consumer

                                                                                                                      • NI Toluna data
                                                                                                                        • Figure 41: Types of loan/ credit products that consumers currently owe money on, by demographics, NI, November 2016
                                                                                                                        • Figure 42: Types of loan/ credit products that consumers currently owe money on, by demographics, NI, November 2016 (continued)
                                                                                                                        • Figure 43: Types of loan/ credit products that consumers currently owe money on, by demographics, NI, November 2016 (continued)
                                                                                                                        • Figure 44: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by demographics, NI, November 2016
                                                                                                                        • Figure 45: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by demographics, NI, November 2016 (continued)
                                                                                                                        • Figure 46: The main reason why consumers took out their most recent loan, by demographics, NI, November 2016
                                                                                                                        • Figure 47: The main reason why consumers took out their most recent loan, by demographics, NI, November 2016 (continued)
                                                                                                                        • Figure 48: The main reason why consumers took out their most recent loan, by demographics, NI, November 2016 (continued)
                                                                                                                        • Figure 49: Agreement with the statement ‘To consolidate my debts/pay off other credit products’, by demographics, NI, November 2016
                                                                                                                        • Figure 50: Agreement with the statement ‘To pay for a new car/vehicle’, by demographics, NI, November 2016
                                                                                                                        • Figure 51: Agreement with the statement ‘For home improvements (eg extension, new kitchen etc)’, by demographics, NI, November 2016
                                                                                                                        • Figure 52: Agreement with the statement ‘To pay for a large purchase (household appliance, new furniture, new boiler etc)’, by demographics, NI, November 2016
                                                                                                                        • Figure 53: Agreement with the statement ‘To pay for a holiday’, by demographics, NI, November 2016
                                                                                                                        • Figure 54: Agreement with the statement ‘To pay for a special occasion (eg wedding)’, by demographics, NI, November 2016
                                                                                                                        • Figure 55: Agreement with the statement ‘To pay for child/children’s education’, by demographics, NI, November 2016
                                                                                                                        • Figure 56: Agreement with the statement ‘To help make ends meet’, by demographics, NI, November 2016
                                                                                                                        • Figure 57: Agreement with the statement ‘To pay for education expenses’, by demographics, NI, November 2016
                                                                                                                        • Figure 58: Agreement with the statement ‘To pay for medical expenses’, by demographics, NI, November 2016
                                                                                                                        • Figure 59: Agreement with the statement ‘To help a family member with debt’, by demographics, NI, November 2016
                                                                                                                        • Figure 60: Agreement with the statement ‘To pay for Christmas or birthday presents/celebrations’, by demographics, NI, November 2016
                                                                                                                      • RoI Toluna data
                                                                                                                        • Figure 61: Types of loan/ credit products that consumers currently owe money on, by demographics, RoI, November 2016
                                                                                                                        • Figure 62: Types of loan/ credit products that consumers currently owe money on, by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 64: Types of loan/ credit products that consumers currently owe money on, by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 65: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by demographics, RoI, November 2016
                                                                                                                        • Figure 66: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 67: Total amount that consumers currently owe on all their loan/credit products (excluding mortgages and student debt), by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 68: The main reason why consumers took out their most recent loan, by demographics, RoI, November 2016
                                                                                                                        • Figure 69: The main reason why consumers took out their most recent loan, by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 70: The main reason why consumers took out their most recent loan, by demographics, RoI, November 2016 (continued)
                                                                                                                        • Figure 71: Agreement with the statement ‘To consolidate my debts/pay off other credit products’, by demographics, RoI, November 2016
                                                                                                                        • Figure 72: Agreement with the statement ‘To pay for a new car/vehicle’, by demographics, RoI, November 2016
                                                                                                                        • Figure 73: Agreement with the statement ‘For home improvements (eg extension, new kitchen etc)’, by demographics, RoI, November 2016
                                                                                                                        • Figure 74: Agreement with the statement ‘To pay for a large purchase (household appliance, new furniture, new boiler etc)’, by demographics, RoI, November 2016
                                                                                                                        • Figure 75: Agreement with the statement ‘To pay for a holiday’, by demographics, RoI, November 2016
                                                                                                                        • Figure 76: Agreement with the statement ‘To pay for a special occasion (eg wedding)’, by demographics, RoI, November 2016
                                                                                                                        • Figure 77: Agreement with the statement ‘To pay for child/children’s education’, by demographics, RoI, November 2016
                                                                                                                        • Figure 78: Agreement with the statement ‘To help make ends meet’, by demographics, RoI, November 2016
                                                                                                                        • Figure 79: Agreement with the statement ‘To pay for education expenses’, by demographics, RoI, November 2016
                                                                                                                        • Figure 80: Agreement with the statement ‘To pay for medical expenses’, by demographics, RoI, November 2016
                                                                                                                        • Figure 81: Agreement with the statement ‘To help a family member with debt’, by demographics, RoI, November 2016
                                                                                                                        • Figure 82: Agreement with the statement ‘To pay for Christmas or birthday presents/celebrations’, by demographics, RoI, November 2016

                                                                                                                    Companies Covered

                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                    Personal Loans - Ireland - January 2017

                                                                                                                    US $1,466.97 (Excl.Tax)