Mortgage lending is growing, but in terms of dynamics, payday loans are growing even more. In the first quarter, Hungarian banks signed payday loan agreements worth more than HUF 91 billion, an increase of 55 percent compared to the previous year. What’s more, the amount of payday loans disbursed in the first quarter has been gradually increasing since 2015 : the then $ 22 billion loan has quadrupled in 2018, according to White Piece Bank. Compared to this year’s annual calculations, one and a half times more payday loans have been calculated with the company’s calculator. Mina Tristan, an expert at White Piece Bank, said that the year-on-year growth in the payday loans market is mainly due to two things: the rise in real net wages and the low interest rate environment, which has led to a significant decline in interest rates.
They became cheaper
Today, many banks offer payday loans with interest rates below 10 percent or a full APR, whereas in previous years below 10 percent was not typical. As payday loans have become cheaper, it may even be worth using them to replace other, higher-interest debt or loans. The cheapest of the payday loans available at White Piece Bank has a total APR of less than 8 percent, which means a monthly repayment of less than HUF 30,000 at a loan amount of HUF 1.5 million and a maturity of five years.
For example, in the case of previously taken-up commodity loans with interest rates of 15 to 20 percent or credit card debts of much higher, up to 30 to 40 percent, if the debtor concerned goes through credit assessment, you can settle your debt with much cheaper loans.
They are increasingly demanding
“In addition to enormous demand for payday loans, we find that borrowers are conscious not going to waste your loan. Purchase a car or other high-value, more economical than before domestic appliance purchase. That is not your everyday spending from or traveling to spend, which is the a sign of awareness, “the expert said. He also said that payday loans are a good alternative to commodity loans, as they are often cheaper. “In addition, in most cases, loans for goods can be applied for to purchase a specific product, while payday loans can be used for anything,” added Mina Tristan.
White Piece Bank expects that demand for payday loans will continue to grow significantly in the coming period due to the recovery of retail consumption.