Borrowers of consumer credits have higher incomes and pay less for their loans in relation to their income compared to previous years. But we are seeing deficiencies in the credit assessment, and many borrowers are still receiving collection notices. Young borrowers are still overrepresented among those that experience early repayment problems. These are the conclusions from this year’s consumer credit survey.
The conclusions of the survey will be presented at a press conference today at 10:00 AM by FI's Deputy Director General Susanna Grufman and Analyst Lars Olausson from FI's Economic Analysis Office.
This is the fourth time FI has conducted its consumer credit survey. Over time, the survey is showing signs of improvement. Those taking out new consumer credits have better income. The size of the loan payments in relation to income have also decreased compared to previous years for those taking unsecured loans. There are also fewer borrowers with low incomes taking out large loans, which is positive from a consumer protection perspective.
At the same time, though, FI is also seeing deficiencies in the credit assessments. Over time, our calculations of income, subsistence costs and loan service payments show that the share of borrowers with a deficit in this calculation is decreasing. But it is a problem that the calculations for one out of six borrowers of unsecured or non-property-backed loans and one out of five borrowers with instalments result in a deficit, indicating that the lenders credit assessments are not good enough. As of 1 November this year, FI has clarified that lenders should require consumers to have a reasonable standard of living even after they have been granted a loan, and we expect the firms to adapt to this guideline.
"For consumers with low income or small margins, it can be difficult if they are granted a loan that they in reality cannot afford," says Deputy Director General Susanna Grufman. "We will follow this carefully going forward."
There are still a lot of borrowers who are receiving collection notices. During the loans' first five months, 5.7 per cent of borrowers received a collection notice, an increase from 4.5 per cent last year. This figure is approximately 8 per cent for borrowers under the age of 25. This is in line with previous analyses showing that young borrowers and borrowers with low income are overrepresented among those that experience early repayment problems.