Personal loans in Ireland hit record high especially for car payments
Personal loans were up across all fields, particularly in car financing, according to new figures from the Banking & Payments Federation Ireland (BPFI).
The newest BPFI Personal Loans Report reveals that the number of car loans increased by 20% year-on-year to 19,552, while the total value of such loans surged by 25% to €259 million.
This is the highest level of car loans since the BPFI began collecting this data in 2020.
The average car loan rose by €366 over the year, reaching €13,267.
BPFI's Head of Sector Research & Analysis, Anthony O'Brien, attributed the continued growth in car loans to rising demand for electric and plug-in hybrid vehicles, along with ongoing financing for second-hand cars.
In total, over 60,000 personal loans were taken out in the first quarter of the year , valued at nearly €700 million.
This represents an annual increase of 22% in volume and 24% in value.
The average personal loan increased by €177 compared to the same period last year, now standing at €11,239.
The report also shows major growth in green loans, which rose 26% in volume to 1,531 loans.
Their total value climbed 29.3% to €35.1 million.
The average green loan reached €22,906, which was more than double the average across all personal loan types.
Home improvement loans also saw a sharp increase, with 15,372 loans drawn down in the first quarter, an 18% increase from last year.
These loans were valued at €198 million, 19% higher than the same period in 2024.
The average home improvement loan increased by €116 to €12,886.
O'Brien said that these numbers show a big start to the year for consumer borrowing, with Q1 setting new records for personal loan drawdowns both in terms of volume and value.
Separately, in Britain, a Supreme Court ruling brought relief to lenders facing possible payouts related to motor finance commissions.
The court overturned a previous decision that could have forced banks to compensate borrowers for undisclosed commissions paid to car dealerships.
While the judgement reduces the potential financial burden on lenders, the Financial Conduct Authority (FCA) is moving forward with a redress scheme covering deals dating back to 2007.
Bank of Ireland, which holds around 2% of the British motor finance market, had already allocated £143 million for possible compensation.
Following the ruling, the bank said it would fully review the judgement but made no further comment.
See More: BPFI, FCA, Loans
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Personal loans in Ireland hit record high especially for car payments
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