According to a report by FCG, the rise in lending rates has increased the values of the interest included in the installments, which has decreased the capital lent with each of them.
The line of personal loans recorded an increase of 5.7% in the last month, thus maintaining a series of nominal growth that has already been running for 33 consecutive months. However, this increase has not been enough to offset the expected inflation and the portfolio has fallen in real terms, according to a recent report by First Capital Group.
According to the firm’s analysis, the rise in active rates has increased the values of the interest included in the installments, which has decreased the capital lent with each of them. What is the impact of this situation on users of personal loans?
Personal loans: why concern is growing
The growing trend of personal loans in reflects the difficulty that many people have to make ends meet due to inflation, job instability and low wages. Personal loans are a widely used financial tool that allows you to meet unforeseen expenses, pay debts or invest in a personal project.
However, like any line of credit, these loans have a cost that must be carefully evaluated before deciding to take them. In this sense, the latest report on the behavior of the personal loan portfolio in the country reveals that although there has been an increase of 5.7% in the last month, the portfolio has fallen in real terms due to expected inflation. The balance rose to $1,327,076 million for the accumulated total, presenting an interannual growth of 67.5%, compared to $792,079 million at the end of the same month of the previous year.
Guillermo Barbero, Partner of FCG explains that “The rise in lending rates that has been taking place in recent months has increased the values of the interest included in the installments, which has decreased the capital that is paid with each one of them.” In other words, at equal installments, if the interest is higher, the borrowed capital must be lower. For this reason, although the line of personal loans has registered an increase of 5.7% in the last month, this rise has not been enough to offset the expected inflation and the portfolio has fallen in real terms.
This scenario can have a significant impact on users of personal loans, who may find that the amount they have borrowed is not enough to cover their needs or that the cost of the installments has become too high in relation to their ability to pay. pay. That’s why, It is essential that applicants for personal loans carefully evaluate their ability to pay and the costs of the line of credit before making a decision.
Source: Ambito
