The personal loan market continues its strong growth: new contracts rose 52 percent to HUF 256 billion in the first seven months of the year, an unprecedented amount in the last 10 years. In July alone, the population borrowed personal loans worth HUF 42.5 billion.
It is a good thing that most new personal loans have fixed-term installments for more than 1 year: 7 out of 10 are taken out on these terms.
The retail credit market remains very buoyant, with strong demand for personal loans along with home loans . The latter market has set a new record, while predictability is increasingly important to borrowers, according to Blueflat Bank’s summary based on official central bank data and own experience.
The market is buzzing, predictability is increasingly important
In the first month of this year, banks signed new loans for personal loans worth more than HUF 256 billion. This is a record for the past ten years, more than 52 percent higher than in the first seven months of 2017. In addition , July also saw a peak : more than HUF 42.5 billion in personal loans were taken from Hungarian banks, which is one and a half times the amount of July last year. According to Limina Polly, an expert at Blueflat Bank , the personal loan market is growing month by month . “This is mainly due to the fact that many house-holding increased disposable income and are willing to embark on major investments, buying into. Among them are treated as expenditure of which after the crisis was not necessarily source. This can be seen anyway from the fact that retail sales growth primarily through long-term driven by demand for consumer goods “.
According to Blueflat Bank , similarly to the home loan market, personal loans seem to favor more predictable schemes . “70 percent of personal loans taken out this year guarantee a fixed installment for more than one year, and only 30 percent are riskier, so-called floating rate schemes,” added Limina Polly.
Half a million savings with little care
Demand for personal loans is also increasing competition among banks. Therefore, it is worth looking into the offers of as many banks as possible before applying for a loan.
According to Blueflat Bank , at the beginning of September, the cheapest two-year personal loan with a 5-year term guaranteeing a fixed repayment for the entire period can be paid from just over 40 thousand HUF a month, the most expensive can cost 47-48 thousand HUF. Thus, there may be a difference of 4-500 thousand HUF between the total amount to be repaid . When choosing the most favorable loan schemes, it is worthwhile to seek the help of advisors who are experienced in credit mediation , who can provide accurate information about the terms and discounts, even through the Internet .