Analytics, Financial Services, Latvia, Loan

International Internet Magazine. Baltic States news & analytics Monday, 30.03.2020, 13:57

Number of borrowers struggling to pay off loans grew in 2018 - watchdog

BC, Riga, 06.08.2019.Print version
The number of borrowers struggling to pay off their loans and extending their loan repayment schedules three or more times increased last year, Baiba Vitolina, head of the Consumer Rights Protection Center (PTAC), said LETA.

The total debt obligations of Latvia's residents have been growing at an increasing rate each year, Vitolina said, adding that the amount of non-bank loans issued in 2018 grew by 7.29% or EUR 43 mln against 2017.

The total value of non-bank loans issued in 2018 was EUR 630 mln.

The steepest growth was recorded for payday loans (42%), consumer loans (20%) and leasing (30%).

Vitolina said that most often people take loans to pay off their bills or debts (38.89%), to buy food and household goods (27.59%), and to buy or repair transport vehicles (27.3%). "Taking a loan to pay off a debt is the most unpleasant trend, as this is not the best financial solution," said Vitolina.

A PTAC survey reveals that 77% of people spend more than planned during their summer holidays, and later 34% have difficulties covering these expenses. 11% of respondents in the survey admitted they had to borrow from a lender, relatives or friends to pay off their debts after the vacation.

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