The financial health of Spanish consumers suffers some ailments when summer arrives. Consumer loans subscribed in the months prior to the holiday period have grown strongly this year and have reached their highest level in two decades, comparable only to the times of the real estate bubble. The trend is an indication that a greater part of consumption is supported by debt, despite the rise in interest rates.
The latest data from the Bank of Spain show that between March and June the volume of these loans was granted at 16,762 million euros, 12% more than a year before. The figure reaches triple that of some years of the last decade and is only surpassed by the levels reached in 2006 and 2007, when they exceeded 18,000 million euros.
These credits have different purposes, ranging from a trip to the purchase of appliances, studies or a car. However, experts place June and the previous months as those with the highest volume of debt to go on vacation and also highlight the levels reached, higher than other times of the year such as Christmas. The current figures are 91% higher than ten years ago and reflect incessant progression since the pandemic.
In its latest barometer on consumer loans, the banking consumer association Asufin has detected that the intention to request a consumer loan reaches 35.9% of those surveyed, the highest percentage since it has been carrying out this work. The cause is, he says, in “a still high propensity to consume, sustained by a solid labor market and by the inertia of several years of optimism,” to which is added “the loss of purchasing power derived from inflation.”
Asufin detects the greatest weight of the credits requested to go on vacation. The Bank of Spain does not have data on the destination of the money, but the association's survey shows that 17% of loans have that purpose, when in its last barometer before the summer it was barely 9%. It is already the main reason, only behind the need for money, and ahead of buying a car. “It is one of those that has grown the most in recent years,” says the author of the barometer, Antonio Luis Gallardo.
The increase in debt occurs despite the fact that financial institutions have been applying rate increases in advance since the beginning of the war in Iran. The ECB raised them in June for the first time since 2023, but the Euribor has been rising for months, while consumer loans have also become more expensive. Asufin calculates that loans less than five years old have gone from 9.88% to 10.06%. Statistics from the Bank of Spain show, however, that in June the cost of these loans ranges from 18.3% for those associated with cards to 6.84% for those for conventional consumption.
At the moment, the Bank of Spain does not detect major risks for households, and the Government limits its action to the bill presented at the beginning of the year to cap interest rates on consumer loans. Despite cases of abuse, the only limits until now were set by the courts. The norm is now in an uncertain parliamentary process.
In its latest report on the financial situation of households, the Bank of Spain highlights its “historically low” levels of debt and financial burden. The savings rate is around 12% and consumer credit, he indicates, is expanding supported by the “dynamism” of private spending. Household income is growing, but at a more moderate pace.
The strong increase in consumer credit contrasts with a more moderate evolution of mortgage debt. Between January and June, banks granted mortgages for 42,610 million euros, 3% more.
