There has been a surge in car and home improvement loans in the first quarter of 2023 as personal lending hit €481m, according to Banking and Payments Federation Ireland's Personal Loan Report.

Overall, the report shows a considerable jump in personal loans activity on the same time last year.

The value of personal loan drawdowns increased by 25.2% year on year in Q1 to €481m, while the number of loans rose by 27.8% to 49,236.

The Banking and Payments Federation Ireland said these are the highest values reached since the data series began in the first quarter of 2020.

A total of 15,167 car loans were drawn down in the first quarter - worth €187m - with the volume rising by 27.4% year on year and values rising by 39.6% over the same period.

The number of home improvement loans rose by 28.7% year on year to 13,950 while the value rose by 17.2% to €147m over the same period.

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The number of loans for education, holiday and special occasions such as weddings increased by 27.4% to 20,119 in Q1 2023 with the value increased by 17.9% to €146m over the same period.

Brian Hayes, Chief Executive, BPFI said, "Our latest report shows a considerable jump in personal lending in the first quarter of 2023 with growth in lending across all categories from car and home improvement loans to loans for other purposes such as holidays and special occasions.

"In particular we have seen a significant rise in car loans values which grew by 39.6% to €187m," he said.

"And while the average loan value fell overall by about €200 to €9,763, the lowest level since Q4 2021, the average car or auto finance loan rose by €1,073 to €11,678, likely reflecting rising car prices and growth in electric and plug-in hybrid vehicles," he added.

The value of green personal loans almost doubled to €19.7m in Q1 2023, an increase of 94.5% year on year. The number of green loans jumped by 82.1% over the same period to 874.

The average green loan is relatively high at €22,486, compared with the average for all loans at €9,763.

Anthony O'Brien, Head of Sector Research & Analysis with BPFI, said these products are relatively new, and are expected to increase significantly.

"For example, the SEAI reported 30,000 retrofits up to a BER of B2 - the energy performance rating, and of those, nearly 60% have started taken place since the start of 2022, so we are really seeing a huge momentum behind this," he stated.