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Personal Loans - Ireland - September 2014

“As a result of the financial crisis and ensuing economic downturn, there has been a dramatic decline both in financial institutions’ willingness and ability to lend and consumers’ willingness and capacity to borrow. With economic recovery now under way, it remains to be seen whether banks and consumers alike will revert to their pre-recessionary lending and borrowing behaviour.”
- Brian O’Connor, Production Manager

This report answers the following questions:

  • What type of personal loan products do consumers own?
  • Why do consumers take out personal loan products?
  • What would motivate consumers to take out a personal loan product in the future?
  • Where are consumers most inclined to get personal loan products from?
  • What level of research do consumers do prior to taking out a personal loan product?



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Table of contents

  1. Introduction

      • Key themes in the report
        • Data sources
          • Definitions
            • Abbreviations
            • Executive Summary

                • The market
                  • Value of outstanding loans down €14 billion between 2009 and 2014
                    • Figure 1: Outstanding loans to households, consumer credit and other loans, IoI, NI & RoI, 2009-19
                  • Forecast
                    • Figure 2: Indexed value of outstanding consumer credit and other loans, NI and RoI, 2009-19
                  • Market factors
                    • NI and RoI economies improving
                      • Consumers regaining confidence and optimism for future
                        • Cost of borrowing relatively low as a result of low interest rates
                          • Half of Irish consumers have no personal loan products outstanding
                            • Only minority of consumers are committed, organised and regular savers
                              • The consumer
                                • Just over half of consumers owe money on a personal loan product
                                  • Figure 3: Type of personal loan products that consumers currently owe money on, RoI and NI, July 2014
                                • Majority of personal loan products taken for one-off purchases or major expenses
                                  • Figure 4: Reason that consumers took out last personal loan product, RoI and NI, July 2014
                                • RoI consumers more open to borrowing in future than NI consumers
                                  • Figure 5: Whether consumers would take out a loan in the future for selected purposes, RoI and NI, July 2014
                                • RoI consumers more likely to return to the same lenders than NI
                                  • Figure 6: Agreement with statements relating to the last loan consumers took out, NI and RoI, July 2014
                                • What we think
                                • Issues and Insights

                                  • What type of personal loan products do consumers own?
                                    • The facts
                                      • The implications
                                        • Why do consumers borrow? And what would motivate them to borrow in the future?
                                          • The facts
                                            • The implications
                                              • Where do consumers get personal loan products from?
                                                • The facts
                                                  • The implications
                                                  • Trend Application

                                                      • Extend My Brand
                                                        • Prepare for the Worst
                                                          • Locavore
                                                          • Market Overview

                                                            • Key points
                                                              • Economic recovery now all but assured in RoI
                                                                • Figure 7: Economic outlook, annual % change, RoI, 2012-15
                                                                • Figure 8: Estimated unemployment levels, 2013-15
                                                              • Economic growth of 2.3% expected for NI in 2014
                                                                • Figure 9: Economic outlook, NI, 2012-15
                                                              • Irish consumer sentiment more upbeat than in recent years
                                                                • Figure 10: Consumer Sentiment, RoI, September 2010-August 2014
                                                                • Figure 11: Consumer confidence, NI, September 2008-June 2014
                                                              • Most consumers describe finances as either ‘healthy’ or ‘OK’
                                                                • Figure 12: How consumers rate their current financial situation, NI and RoI, July 2014
                                                              • Debt write-offs down in NI, but set to increase in RoI
                                                                • Low interest rate environment keeping cost of borrowing down
                                                                  • Figure 13: Bank base interest rate, %, European Central Bank & Bank of England, 2008-14
                                                                • Cost of borrowing creeping upwards for RoI consumers
                                                                • Competitive Context

                                                                  • Key points
                                                                    • Almost half of all consumers have no personal loan products
                                                                      • Figure 14: Consumers that do not currently owe money on any personal loan product, by gender, NI and RoI, July 2014
                                                                    • Consumers in full-time employment most likely to owe money on a loan
                                                                      • Figure 15: Consumers that do not currently owe money on any personal loan product, by work status, NI and RoI, July 2014
                                                                    • Scant evidence of structured, committed saving among Irish consumers
                                                                      • Figure 16: Methods in which consumers contribute to their savings, NI and RoI, January 2014
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Outstanding loans to consumers down one third between 2009 and 2014
                                                                        • Figure 17: Outstanding loans to households, consumer credit and other loans, IoI, NI & RoI, 2009-19
                                                                      • Value of outstanding loans expected to dip slightly between 2014-15
                                                                        • Pre-recessionary heights not likely in foreseeable future
                                                                          • Figure 18: Indexed value of outstanding consumer credit and other loans, NI and RoI, 2009-19
                                                                      • Strengths and Weaknesses

                                                                        • Strengths
                                                                          • Weaknesses
                                                                          • Companies and Innovations

                                                                            • Key points
                                                                              • Innovations
                                                                                • Barclays’ new mobile app allows customers to apply for a personal loan
                                                                                  • US company Kabbage to expand into the personal loan market
                                                                                    • Company profiles
                                                                                      • Allied Irish Bank (AIB) Group
                                                                                        • Bank of Ireland (BoI)
                                                                                          • Danske Bank
                                                                                            • Halifax
                                                                                              • HSBC
                                                                                                • Nationwide
                                                                                                  • Permanent TSB
                                                                                                    • Santander
                                                                                                      • Ulster Bank
                                                                                                      • The Consumer – Ownership of Personal Loan Products

                                                                                                        • Key points
                                                                                                          • More than half of consumers have a personal loan product
                                                                                                            • Figure 19: Type of personal loan products that consumers currently owe money on, RoI and NI, July 2014
                                                                                                          • Older consumers least likely to owe money on personal loans
                                                                                                            • Figure 20: Consumers who do not currently owe money on any personal loan product, by age, RoI and NI, July 2014
                                                                                                          • Credit union loan most popular in RoI, but far less so in NI
                                                                                                            • Figure 21: Consumers who currently owe money on a loan from credit union, by age, RoI, July 2014
                                                                                                          • Credit union loans more popular among C2DEFs than among ABC1s
                                                                                                            • Non-mainstream providers fill the ‘credit union gap’ in NI
                                                                                                              • Figure 22: Selected personal loan products that consumers currently owe money on, RoI and NI, July 2014
                                                                                                            • Overdrafts most popular loan type in NI, second in RoI
                                                                                                              • Figure 23: Consumers who currently owe money on a current account overdraft facility, by age, RoI and NI, July 2014
                                                                                                              • Figure 24: Consumers who currently owe money on a current account overdraft facility, by work status, RoI and NI, July 2014
                                                                                                            • Overdrafts are good short-term solution, but may not offer the best value to consumers
                                                                                                                • Figure 25: Annual average retail interest rates on overdraft facilities, UK (including NI) and RoI, 2009-14
                                                                                                              • Free overdraft facilities more common in NI than in RoI
                                                                                                                • Figure 26: If consumers who use a current account overdraft facility pay for this facility, RoI and NI, July 2014
                                                                                                              • 35-44s most likely to have outstanding personal loans
                                                                                                                • Figure 27: Consumers who currently owe money on a personal loan (eg from a bank), by age, RoI and NI, July 2014
                                                                                                            • The Consumer – Reasons for Last Loan Ownership

                                                                                                              • Key points
                                                                                                                • Most loans taken for one-off purchases or major expenses
                                                                                                                  • Figure 28: Reason that consumers took out last personal loan product, RoI and NI, July 2014
                                                                                                                • Significant minority borrow to ease financial stress
                                                                                                                  • Figure 29: Consumers who borrowed money for financial reasons, RoI and NI, July 2014
                                                                                                                • Little appetite for borrowing to finance lifestyle or non-essential buying
                                                                                                                  • Figure 30: non-essential reasons that consumers took out last personal loan product for holiday, occasion or celebration, RoI and NI, July 2014
                                                                                                              • The Consumer – Reasons for Future Loan Ownership

                                                                                                                • Key points
                                                                                                                  • RoI consumers more open generally to borrowing than NI consumers
                                                                                                                    • Figure 31: Whether consumers would take out a loan in the future for selected purposes, RoI and NI, July 2014
                                                                                                                  • Key difference is greater access to public education and healthcare in NI
                                                                                                                    • Figure 32: What consumers would take out a loan for, RoI and NI, July 2014
                                                                                                                  • Half RoI and a third of NI consumers would borrow to buy a car
                                                                                                                    • Figure 33: Consumers who would in future take out a loan to pay for a new car/vehicle, by age, RoI and NI, July 2014
                                                                                                                  • ABC1s and women most open to borrowing for education/qualifications
                                                                                                                    • Figure 34: Consumers who would in future take out a loan to pay for selected education and training-related expenses, by gender and socio-economic background RoI and NI, July 2014
                                                                                                                  • 35-54 most likely to borrow for home improvements and large purchases
                                                                                                                      • Figure 35: If consumers would in future take out a loan to pay for home improvements, by gender and age, RoI and NI, July 2014
                                                                                                                      • Figure 36: If consumers would in future take out a loan to pay for a large purchase, by gender and age, RoI and NI, July 2014
                                                                                                                    • Borrowing for occasions and presents/celebrations appeals to young
                                                                                                                        • Figure 37: Consumers who would in future take out a loan to pay for a special occasion, by age, RoI and NI, July 2014
                                                                                                                        • Figure 38: Consumers who would in future take out a loan to pay for Christmas or birthday presents/celebrations, by age, RoI and NI, July 2014
                                                                                                                      • ABC1s in employment would borrow to consolidate existing debts
                                                                                                                        • Figure 39: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by gender and socio-economic background and work status, RoI and NI, July 2014
                                                                                                                      • … whereas intent to borrow to make ends meet should set off alarm bells
                                                                                                                          • Figure 40: If consumers would in future take out a loan to help make ends meet, by work status and age, RoI and NI, July 2014
                                                                                                                      • The Consumer – Attitudes towards Personal Loan Products

                                                                                                                        • Key points
                                                                                                                          • Familiarity, existing relationship key factors when taking loan in RoI
                                                                                                                            • Figure 41: Agreement with statements relating to the last loan consumers took out, NI and RoI, July 2014
                                                                                                                          • Only quarter of RoI, and a fifth of NI consumers borrowed from their main bank
                                                                                                                              • Figure 42: Agreement with the statement ‘I took the loan out with my main bank’, by gender, NI and RoI, July 2014
                                                                                                                            • Only small minority undertook online research before taking loan
                                                                                                                              • Majority of consumers handling loan repayments comfortably
                                                                                                                                • Figure 43: Consumers who agree ‘I have struggled to make loan repayments in the last 12 months’, by socio-economic background, NI and RoI, July 2014
                                                                                                                            • Appendix

                                                                                                                              • NI Toluna tables
                                                                                                                                • Figure 44: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014
                                                                                                                                • Figure 45: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014 (continued)
                                                                                                                                • Figure 46: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014 (continued)
                                                                                                                                • Figure 47: If consumers using current account overdraft facilities pay for their overdraft facility, by demographics, NI, July 2014
                                                                                                                                • Figure 48: Reason that consumers took out last personal loan product, by demographics, NI, July 2014
                                                                                                                                • Figure 49: Reason that consumers took out last personal loan product, by demographics, NI, July 2014 (continued)
                                                                                                                                • Figure 50: Reason that consumers took out last personal loan product, by demographics, NI, July 2014 (continued)
                                                                                                                                • Figure 51: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by demographics, NI, July 2014
                                                                                                                                • Figure 52: If consumers would in future take out a loan to pay for a new car/vehicle, by demographics, NI, July 2014
                                                                                                                                • Figure 53: If consumers would in future take out a loan to pay for home improvements, by demographics, NI, July 2014
                                                                                                                                • Figure 54: If consumers would in future take out a loan to pay for a large purchase, by demographics, NI, July 2014
                                                                                                                                • Figure 55: If consumers would in future take out a loan to pay for a holiday, by demographics, NI, July 2014
                                                                                                                                • Figure 56: If consumers would in future take out a loan to pay for a special occasion, by demographics, NI, July 2014
                                                                                                                                • Figure 57: If consumers would in future take out a loan to pay child/children’s education, by demographics, NI, July 2014
                                                                                                                                • Figure 58: If consumers would in future take out a loan to help make ends meet, by demographics, NI, July 2014
                                                                                                                                • Figure 59: If consumers would in future take out a loan to pay for qualifications/training, by demographics, NI, July 2014
                                                                                                                                • Figure 60: If consumers would in future take out a loan to pay for education expenses, by demographics, NI, July 2014
                                                                                                                                • Figure 61: If consumers would in future take out a loan to pay for medical expenses, by demographics, NI, July 2014
                                                                                                                                • Figure 62: If consumers would in future take out a loan to help a family member out, by demographics, NI, July 2014
                                                                                                                                • Figure 63: If consumers would in future take out a loan to pay for Christmas or birthday presents/celebrations, by demographics, NI, July 2014
                                                                                                                                • Figure 64: Agreement with statements relating to the last loan consumers took out, by demographics, NI, July 2014
                                                                                                                                • Figure 65: Agreement with statements relating to the last loan consumers took out, by demographics, NI, July 2014 (continued)
                                                                                                                              • RoI Toluna tables
                                                                                                                                • Figure 66: Types of personal loan products that consumers currently owe money on, by demographics, RoI, July 2014
                                                                                                                                • Figure 67: Types of personal loan products that consumers currently owe money on, by demographics, RoI, July 2014 (continued)
                                                                                                                                • Figure 68: If consumers using current account overdraft facilities pay for their overdraft facility, by demographics, RoI, July 2014
                                                                                                                                • Figure 69: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014
                                                                                                                                • Figure 70: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014 (continued)
                                                                                                                                • Figure 71: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014 (continued)
                                                                                                                                • Figure 72: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by demographics, RoI, July 2014
                                                                                                                                • Figure 73: If consumers would in future take out a loan to pay for a new car/vehicle, by demographics, RoI, July 2014
                                                                                                                                • Figure 74: If consumers would in future take out a loan to pay for home improvements, by demographics, RoI, July 2014
                                                                                                                                • Figure 75: If consumers would in future take out a loan to pay for a large purchase, by demographics, RoI, July 2014
                                                                                                                                • Figure 76: If consumers would in future take out a loan to pay for a holiday, by demographics, RoI, July 2014
                                                                                                                                • Figure 77: If consumers would in future take out a loan to pay for a special occasion, by demographics, RoI, July 2014
                                                                                                                                • Figure 78: If consumers would in future take out a loan to pay child/children’s education, by demographics, RoI, July 2014
                                                                                                                                • Figure 79: If consumers would in future take out a loan to help make ends meet, by demographics, RoI, July 2014
                                                                                                                                • Figure 80: If consumers would in future take out a loan to pay for qualifications/training, by demographics, RoI, July 2014
                                                                                                                                • Figure 81: If consumers would in future take out a loan to pay for education expenses, by demographics, RoI, July 2014
                                                                                                                                • Figure 82: If consumers would in future take out a loan to pay for medical expenses, by demographics, RoI, July 2014
                                                                                                                                • Figure 83: If consumers would in future take out a loan to help a family member out, by demographics, RoI, July 2014
                                                                                                                                • Figure 84: If consumers would in future take out a loan to pay for Christmas or birthday presents/celebrations, by demographics, RoI, July 2014
                                                                                                                                • Figure 85: Agreement with statements relating to the last loan consumers took out, by demographics, RoI, July 2014
                                                                                                                                • Figure 86: Agreement with statements relating to the last loan consumers took out, by demographics, RoI, July 2014 (continued)

                                                                                                                            Personal Loans - Ireland - September 2014

                                                                                                                            US $1,453.83 (Excl.Tax)