Who actually uses installment loans? A recent study looked into the question and analyzed the use, structure and uses of consumer finance. The results are sometimes surprising.
For a current study by the banking association, the market research company asked for more than 1,800 households about their consumption and financing habits. According to this, 26 percent regularly use installment loans to purchase consumer goods. Another 11 percent use a credit facility, 10 percent use a credit facility and 5 percent have a leasing contract.
Households using finance have an average of 2 contracts. The outstanding financing amount is USD 10,600 and an average of USD 300 is repaid per month.
Offers to finance consumer goods are expected by many consumers today. Two out of three financing users ask themselves in the trade about corresponding options for monthly payment. Without these offers, two thirds of all financed purchases would not have taken place. This result of the study underpins the economic importance of financing that supports private consumption and satisfies consumer needs.
Closing channels for loans
Almost half of all installment loans are made with a bank or savings bank. 57 percent of those surveyed do this on site in a bank branch and 42 percent use the Internet during the course of graduation. Only 1 percent state that they have completed their loan entirely online.
Uses of installment loans
The most important reason to use financing is to buy a car. Around two thirds of all installment loan users buy a car with their loan. New cars are financed on average with 19,400 dollars and used cars with 11,500 dollars.
This is followed by consumer electronics (16 percent), furniture and kitchen equipment (16 percent) and large household appliances (13 percent).
High earners also use installment loans
The monthly net household income of credit users is around 3,000 dollars, which is more than 200 dollars above the average of all respondents.