bad news, they will be even more expensive and rarer in 2023

Rewrite this contentFinancing a project with consumer credit is likely to be more expensive and more difficult in 2023. Faced with growing pressure on their margins, specialized establishments continue to increase their rate schedules and are becoming more and more selective.2022 was a paradoxical year for consumer credit. Two months of lower rates in January and February, in a context of strong demand, then a sudden reversal: the beginning of the war in Ukraine, and its consequences, in particular, on the economic situation, completely changed the situation, leading to a continuous rise in rates offered to consumers to finance their projects, whatever they may be.All personal loans combined, the average rate rose from 3.63% in January to 4.85% at the end of the year, an increase of 122 basis points, according to the specialized comparator An example: borrowing to buy a used car using a loan of 15,000 euros over 60 months costs, on average, 442 euros more at the end of December than at the beginning of January.We are still there at the start of 2023. Even more than ever: the rates offered in January by specialized establishments are up sharply on December. Increase facilitated by the update, at the beginning of the month, of the wear and tear thresholds, these maximum rates authorized by the regulations.Each month, MoneyVox offers you, in partnership with the consumer credit comparator, a barometer of consumer credit rates. It presents the average and excellent rates, at about thirty banks, insurance companies and credit organizations, according to the type of project, the amount of financing and the desired repayment period. The rate barometer – January 2022Automobile(new and used)Over 12 monthsUp to 36 monthsUp to 60 monthsUp to 84 monthsUp to 5000 eurosexcellent rate2,98%4,40%4,69%5,74%Average rate8,14%8,34%7,61%7,44%Up to 15000 eurosexcellent rate1,57%3,39%3,67%4,40%Average rate3,90%4,85%5,06%5,35%Up to 40000 eurosexcellent rate1,68%3,36%3,79%4,34%Average rate3,71%4,70%4,91%5,18% WorksOver 12 monthsUp to 36 monthsUp to 60 monthsUp to 84 monthsUp to 5000 eurosexcellent rate3,97%4,72%4,98%5,21%Average rate8,41%8,53%7,78%7,23%Up to 15000 eurosexcellent rate1,58%3,58%3,67%3,92%Average rate3,94%4,86%5,04%5,25%Up to 40000 eurosexcellent rate1,66%3,40%3,70%3,93%Average rate3,62%4,61%4,83%5,03% Other loanspersonalOver 12 monthsUp to 36 monthsUp to 60 monthsUp to 84 monthsUp to 5000 eurosexcellent rate3,68%5,00%5,47%5,89%Average rate8,58%8,85%8,12%7,86%Up to 15000 eurosexcellent rate1,61%3,73%4,07%4,63%Average rate4,11%5,06%5,27%5,50%Up to 40000 eurosexcellent rate1,70%3,82%4,21%4,49%Average rate3,84%4,90%5,11%5,30%Rates recorded during the week of January 16, 2023. Data provided by the consumer credit comparator CheckmonCredit.frMore expensive loans…Everything indicates that this trend will be sustainable. It should even mark 2023. Carrying out a project using financing will be more complicated this year, summarizes Sergio Monteiro, founder of the specialized comparator expensive, to begin with. Credit institutions are, in fact, faced with an increase in their costs, those taken into account in the formation of their rate grids. Of their refinancing costs in particular, that is to say the price they pay to access the money that they will then lend to their customers. Since March 2022, the rate of 5-year OATs, which serves as a reference base for these costs, has continued to increase, rising from -0.24% to more than 2.5% currently.Pool your credits! Up to -60% on your monthly payments. Reply in 48hProblem: establishments cannot pass on this increase to the rates charged. Why? Due to wear thresholds, which do not increase at the same rate as refinancing costs. Clearly, the rise in the latter had to be partly absorbed by the banks’ margins.Consumer credit: the best offers online… and rarer?These pressures on banks’ margins have consequences for borrowers, and not just in terms of interest rates. Rather than distributing loans that are not very or not profitable, the establishments, in fact, choose to reduce the flow by showing themselves more selective in choosing their clients. The signs of this (relative) drying up are already there: after having posted good annual growth until September, the production of personal loans fell: -17.5% in November, according to the ASF (1).These restrictions on the granting also intervene in a degraded economic context for the consumers. It is no coincidence that, since the end of 2022, the ASF has published an observatory of weak signals in the consumer credit market. His observation, in January 2023, is clear: the quality of loan demand is eroding, while repayment deferrals and arrears are increasing. In other words, lending becomes more riskywhich justifies tightening the conditions for granting new loans.Wear rate: a monthly update from February 1stIn this relatively gloomy landscape, good news has fallen, at least for the banks. From February 1st, and until at least July, the wear rates will be updated every month, and no longer every calendar quarter, as is customary. A way, hopes the Bank of France, to smooth the rise in rates and limit the risk of blockage.(1) French Association of Financial Companies, which brings together all the specialized establishments. In terms of consumer credit (revolving credit, assigned credit, personal loans, lease with option to purchase), ASF members represent nearly 50% of the outstandings of all credit institutions (and the majority revolving credit operations). and and more content about bad news, they will be even more expensive and rarer in 2023