More installment payments among young people, thanks to low rates and technology
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In the last five years, the weight of the under 35s among those who take out loans for the purchase of goods and services has grown steadily: today they are worth 25.2% while in 2018 they are 22.3%. Thanks to the attractive credit conditions derived from low interest rates. And also the spread of digital tools for shopping and new forms of deferred payment (the so-called Buy now pay later, “buy now and pay later”) which, being interest-free, have proved particularly attractive. So much so that we have seen big names in digital payments such as Paypal land in this segment. The fault, however, lies with the crisis: “breaking up” payments is increasingly a necessity. And, if it isn’t, it’s a chance to go shopping that maybe you wouldn’t have afforded yourself.
This is the scenario obtained from Crif data relating to the first nine months of 2022: the share of the under 25s on the total loans requested (overall of finalized and personal loans) was equal to 6.7% of the total against 5, 7% in the corresponding period 2021 and 5.1% five years ago. If we analyze the age group between 25 and 35, however, at the end of September the incidence on the total was equal to 18.5% of the total against 17.4% a year ago and 17.2% of 2018.
In the last year, therefore, there has been a significant leap in the propensity of this generation – straddling the Millennials and the “Z” – towards financing.
«There are a series of forces that have pushed in this direction – explains Simone Capecchi, executive director of Crid – including the pandemic that has accelerated digitization and pushed for online purchases. Then there is the financial issue: in the last decade we have benefited from low rates, with Tan and Taeg within everyone’s reach». And he adds: «Alongside the very young, the age group that recorded a growth in personal loans was that of the over 55s, again thanks to the boost from digitalisation».
The role of the Bnpl
The so-called tools play an important role Buy now pay later (Bnpl) which allow payment to be deferred in three (sometimes four) installments of equal amount, without carrying out in-depth checks on the credit situation of the buyers: «These are payment deferrals, not loans – continues Capecchi – but certainly it is of an increasingly widespread behaviour. Also according to Crif in 2021 the use of the Bnpl recorded an average increase of 134 percent.
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