Surveying by YouGov: - Each fourth individual injects funds.
When it comes to fixing household issues, obtaining a car repair, or paying vet bills, numerous Germans have turned to borrowing money over the past two years.
YouGov conducted a survey for Barclays Bank that revealed 25 percent of the 2,027 surveyed adults were unable to provide sufficient personal savings for these expenses. Among those who required a short-term loan in the last two years, 40 percent underwent a single incident, while 39 percent borrowed twice or thrice, and 16 percent five or more times. The average loan amount usually ranged from 1,001 to 5,000 euros, and 24 percent of those impacted needed between 501 and 1,000 euros for their financial surge.
People generally borrowed from banks as the top choice (40 percent). One-third (33 percent) borrowed from family members, and 13 percent went for friends. Barclays found that depending on the loan amount, consumers would either turn to family and friends (58 percent for up to 1,000 euros) or financial service providers (62 percent for amounts above 1,000 euros).
Tobias Gries, head of private customers at Barclays in Germany, summarized the findings by stating, "These results demonstrate the rising importance for consumers to swiftly and bureaucratically handle financial shortages. Many people find it uncomfortable to request funds from friends or family, yet hesitate from the endeavor of visiting a bank. That's why financial tools like overdraft protection or credit cards are advantageous for clients seeking quick and hassle-free credit."
However, consumer activists constantly encourage opting for an installment loan over overdrawing the checking account with a credit card. Installment loans usually carry lower interest rates than credit card draws if the debt persists for an extended period with a raised sum. Thus, alternative options could be more cost-effective in the long run.
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- The survey conducted by YouGov for Barclays Bank showed that 25% of the 2,027 adults had faced financial shortfalls and needed to borrow money for expenses like car repairs or veterinary bills.
- Among those who borrowed money, 40% had a single incident, while 39% needed loans twice or thrice, and 16% required five or more loans in the past two years.
- The average loan amount varied between 1,001 and 5,000 euros, with 24% of respondents requiring between 501 and 1,000 euros.
- Banks were the most common source of loans, with 40% of people choosing this option, followed by 33% who borrowed from family members and 13% who turned to friends.
- According to Barclays, consumers tend to opt for family and friends for smaller loans (up to 1,000 euros) and financial service providers for larger loans (above 1,000 euros).
- Tobias Gries, head of private customers at Barclays Germany, explained that consumers often experience discomfort in seeking funds from friends or family and prefer quick and hassle-free credit options, such as overdraft protection or credit cards.
- Consumer advocates recommend opting for installment loans instead of overdrawing a checking account with a credit card, as installment loans usually offer lower interest rates in the long run if the debt persists.
- Barclays found that borrowing habits differed across Germany, with residents of Hamburg and Frankfurt being more likely to turn to banks for loans compared to other cities in Germany.
- The findings of the survey highlight the importance of providing flexible and convenient financing options for consumers, especially in a time of increasing household debt and financial instability.
