Fastest growing loans in Sweden
The fastest growing share of consumption loans in Sweden are represented by households with large loans. At time being do they not only have the fastest growth rate, but also constitute the largest share overall for new lending. There has been a notable increase in the past four years, partially due to low interest rates, reports the Swedish Financial Supervisory Authority (Finansinspektionen). This is a trend also noted by Swedish loan site Kredity. What lies ahead for the Swedish public remains to be seen. But several aspects in change, both proposed and implemented, act in the favor of borrowers.
Exemptions in amortization due to Coronavirus
As of April this year, all Swedish banks may grant exemptions in amortization for all mortgages. This includes both existing mortgagors and new ones. The initiative has been taken by Finansinspektionen due to the great disruptions to both the Swedish economy and personal finances caused by the Coronavirus (COVID-19). Thus providing more economic manoeuvrability during the pandemic. The exemption in amortization will in its current form be available until the end of June 2021.
Proposed reliefs in smaller loans
Another proposal from the Swedish government, is regarding the application for smaller loans for a driver’s license. ”The process needs to be made easier, a driver’s license may be an introduction to a job,” says minister of infrastructure Tomas Eneroth. The Swedish government has therefore assigned the National Board of Student Aid (CSN) to propose a change. The emphasis of the change will be on both easier and more effective managing of this kind of loans, which also are administered by CSN. As of 2021 the new proposal has been implemented, with upcoming expansions. From December 2021 it will also include 19-20 year olds with a high school diploma.
Continuous growth in the value of loans
Since a dip in 2019 the total value of loans in Sweden have increased. While mortgages are still the lion’s share of total lending of Swedish households with 82%, consumption loans are on the rise. With an annual growth rate of 6.2% for households’ consumption loans, a cautious trend may emerge. The percentage for mortgages during the same time period was 5.5%. The rise is especially notable after a prolonged period with humble growth in the value of loans with a stable 5% in total. A period with levels of growth in loan values that has only been preceded by 2012-2014 in a 10 year period. This is a trend that hasn’t gone by unnoticed by the market either. As loan comparison site Kredity also reports on growing numbers in traffic for loans without UC. Which is the largest credit reporting company in Sweden.