In France, almost half of households (46.5%) had at least one loan in 2015. Whether it is a home loan or a consumer loan, a credit is a tool for financing projects that allows borrowers to make sometimes modest investments (hi-fi, travel), or sometimes more important (automobile, house or apartment).
How do households plan to use credits for their projects? How do they see their future with the loans they already have? Answers.
French cautious about credit
Nearly one in two households now has a loan. This figure, stable for the second consecutive year according to data from the House Loan Observatory, reached a historic low if we look at the data for the last 15 years.
Intentions to take out loans in the future are on the other hand increasing, and thus indicate a possible reversal. “4.6% of households plan to take out a mortgage in the future (compared to 4.2% at the end of 2014 and 4.5% at the end of 2013) and 3.9% a consumer loan (against 3.6 % end 2014 and 3.9% end 2013) ”can we read in the 28th wave of the survey carried out by SNT -Sopress for the House Loan Observatory.
“The intentions of households are therefore always very cautious, disconnected in this respect from the developments reflected in the activity of the markets”.
French morale plays on whether or not to use bank credit
When the French are in high spirits, they consume and use credit.
When they are not in high spirits, then they fall back and do not use the financing solutions to carry out their projects. This simplified vision is however fairly close to reality, if we cross the data collected by the House Loan Observatory and INSEE.
“ As of 2009, the use of consumer credit was less intense. When households are worried about their future and their budgetary constraint becomes more significant (under the effect of rising unemployment, for example), they postpone their sustainable consumption projects : the purchase of an automobile, for example example, but also the replacement of household appliances or the acquisition of leisure equipment (especially boats and caravans) ”.
Successive crises have had the effect of slowing the French in their spending. But morale returned (a little) in 2015, which may bode well for a credit boost, whether for a real estate project or a consumer project. “For the future, the increase in intentions to take out new mortgage and consumer loans allows us to expect the continued recovery in the holding rate: the renewed optimism of households seems conducive to this”.
Most consumer loans are used to finance capital projects
91.5% of consumer credits are used to finance the completion of equipment projects (cars, motorcycles, household equipment, housing improvement works)
The purchase of a car or the purchase of a motorbike is the main project which is carried out with a consumer credit (14.5% of all households) before purchases for the house (6.0%) and housing improvement works (3.8%).
Intentions to use credit in the coming months are picking up. For real estate loans, the percentage of intention (4.5%) returns to a level comparable to 2010 (4.8%). Low loan rates and prices more in line with market reality partly explain this phenomenon.
For consumer loans, the percentage of intention, at 3.9%, remains below the 4% mark, above which it has not risen since 2011 (4.1%). In question, a vision of the future still too pessimistic.
The balance of confidence of the French for 2016 thus reaches -42 according to a Le-Edoxa survey (difference between those who think that 2016 will be a prosperous year, and those who think that it will be a difficult year).
The French find it difficult to look at the future calmly, but the simmering intentions of subscription may indicate a recovery on the credit market. The morale of the French over the coming months will be decisive in determining whether 2016 marks a real recovery on this subject.
Another solution is available to the French: the grouping of credits. Instead of taking out a new loan to finance an equipment project, households can decide to have their loan bought back. This allows you to group all the credits into a single monthly payment.