Payday Loans and mortgages in Italy: trends and consumer behavior


We have seen how, in terms of consumer credit, the situation at European level is very varied. Now we can analyze the Italian situation in more detail, trying to draw a picture of current trends and the behavior of consumers who choose to apply for a loan.

The latest analyzes based on data from the end-to-end knowledge company show that in February 2012 the demand for mortgage loans by Italian households decreased by 48% compared to the same month of 2011. The negative trend has continued for 14 months, in parallel with the worsening of the economic crisis.

The most popular mortgage class is between 25 and 30 (30%), even if there is a slight increase for those between 15 and 20 years. The most requested amounts are those between 100,000 and 150,000 euros, even if the applications for amounts below 100,000 euros are increasing. The average value is € 130,700: this is the lowest figure in the last five years.

In the same month, the demand for loans (both finalized – that is, those that are required to buy goods such as cars and motorcycles – and personal) decreased by 17% compared to February 2011. 67% of the applications for loans targeted less than 5,000 euros.

The figures for 2011 also showed a rather negative general trend: loan applications decreased by 4.7% overall compared to 2010. The most significant drop was in the loans targeted: this contraction is in line with the more general contraction in Italian consumption, due to the continuing economic crisis and the decrease in household purchasing power.

These data tell us that Italians are adopting more conservative behaviors towards consumer credit, limiting the use of loans and mortgages only to strictly indispensable cases. Not only that: often families use loans to maintain their standard of living unaltered despite the economic crisis, and many loans are required for the management of current expenses and not for new purchases of goods.

From the credit institutions’ point of view, in 2011 there was a 3.7% decline in loans granted compared to 2010. In this context, the creditworthiness of borrowers has become an even more important selection criterion. Loans granted after an assessment of credit reliability, in fact, fell only 2.7% over the same period.

In light of all this, consumers are becoming increasingly aware of the role that their credit reference has in the assessment by banks and financial companies for the purpose of providing credit.