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Timely repayments: Consumers have taken out more loans

Refunds on time
Consumers borrowed more

Schufa posted nearly seven million new loans last year. Above all, amounts of less than 1000 euros were requested. One reason is reseller offers to pay for purchases later. According to a study, these offers are not without risk.

According to a study, people in Germany took out multiple installment loans for the first time in four years. In the last year, smaller sums have been requested, especially among young people. Major purchases, on the other hand, were postponed, as can be seen from the credit and risk compass of the Schufa credit agency. At the same time, consumers proved themselves responsible debtors: they repaid their installment loans reliably even in the second year of Corona.

As in the previous two years, 97.9 percent of all borrowed installments were served as contractually agreed. According to the study, the pandemic had no negative effects on the indebtedness and over-indebtedness of people in Germany even in 2021.

Last year Schufa counted around 6.9 million in newly concluded installment loans. This was about 4.5% more than in 2020. The demand for loans under 1000 euros has increased particularly strongly. Their share of all newly concluded contracts has increased from 19.9% ​​in 2020 to 29.5% today. On the other hand, the shares of medium installment loans (from € 1000 to € 10,000) and large (from € 10,000) were down.

“The Germans are putting off major purchases. This also reflects the mood in our consumer surveys, which we conduct regularly,” explained Schufa board member Ole Schröder. In a May poll, 57% of people said they were putting off large investments.

“Payment solutions can become a debt trap”

Energy prices were already driving consumer prices up last year. Inflation averaged 3.1 percent for the year. According to information, the lower loan amounts were particularly popular with young people last year. The average amount of new loans under 1000 euros was around 409 euros for all age groups, but for children aged 18 to 19 it was 343 euros. “The high proportion of low loans, especially in the younger and Internet-savvy target groups, can of course be attributed to the so-called buy now pay later offers, which are increasingly in demand,” explained Schröder.

This is buying at the pump via online payment services. According to the financial regulator BAFIN, with some payment services consumers can subsequently postpone the payment target to a later date or convert the outstanding invoice amount into installment payments. With other payment services, the open invoices a customer has with a reseller are summarized over a specified period of time and only become payable at a later time. “These seemingly practical payment solutions can quickly turn out to be a debt trap for young people,” Schröder warned. BAFIN also recently warned that it’s easy to lose track.

Consumer advocates criticize the fact that there is often no credit check with this form of financing and that information before the end of the lesson is sometimes insufficient. As a result, consumers could only misjudge what they were getting into. The data collected and evaluated by Schufa and other credit agencies is important to millions of people who want to take out loans or sign leases. The credit compass does not include mortgages and leasing contracts.

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