A survey commissioned by Nordea indicates that more than half of Finnish consumer credit borrowers have taken out their credit from banks. Other common sources were other financial institutions, such as vehicle financiers, payday loans and interest-bearing hire purchase.
Finns take out different types of consumer credit for unexpected expenses. Based on the findings of a survey commissioned by Nordea, a new car or different kinds of renovation projects are the most common reasons for taking out consumer credit. The average remaining debt amount of consumer credit borrowers was around 5,000 euros.
“Approximately one out of three respondents had taken out consumer credit during the past five years. Consumer credit amounts vary depending on their planned use. Only one out of six consumer credit borrowers had more than 10,000 euros remaining of their credit,” says Sara Mella, Head of Personal Banking Finland at Nordea.
Familiar and safe bank
The survey showed that banks are usually considered reliable, solvent and responsible consumer credit lenders.
“The bank always forms an overall view of a customer’s banking, and decisions are not made based on one single need for finance. We as a bank always know our customers better than any other actors on the market. Therefore taking out consumer credit from a bank is safer and more affordable,” Mella says.
“Moreover, if we think that a customer’s loan servicing capacity has already weakened, we also offer them advice on managing their finances,” Mella points out.
All operators under supervision
Today, not all parties offering consumer credit are under supervision. The majority of the respondents (around 80%) felt that payday loan providers should be supervised more closely.
“All consumer credit providers should be placed under supervision. The increasing indebtedness of young people in particular is becoming a matter for concern and we hope that all credit lenders would act responsibly, complying with the same rules,” Mella says.
“Two out of three respondents considered a positive credit register a welcomed improvement, and we at the bank agree on this. It is also in the interest of the consumers and their security that all credit taken out by a customer would show to any new credit lenders,” Mella continues.
The survey was conducted as an Internet panel by Kantar TNS Gallup on commission by Nordea between 31 May and 10 June 2019. The responses have been weighted taking into account the respondent's age, sex and place of residence. The number of Finnish respondents between the ages of 18 and 79 was 1,070. In the survey, consumer credit referred to one-off credit, such as consumer credit offered by finance companies, hire-purchase acquisitions and payday loans. Housing loans, student loans and credit card credit were not defined as consumer credit in this survey.
For further information:
Sara Mella, Head of Personal Banking Finland at Nordea, tel +358 50 568 8035
Group Communications, Nordea, tel +358 9 4245 1006
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