While Italian families are still struggling with the impact of rising interest rates and inflation over the past two years, they have continued to turn to credit to meet expenses and improve their housing conditions. More than half of Italian residents (52,7%) actually have an active credit agreement, a figure up 2,6% compared to 2023 (Crif – Retail Credit Observatory, June 2024).
Specifically, requests for personal loans increased by 5% in the first half of 2024 compared to the same period of the previous year, with interest rates around 9-10% (Bank of Italy – Statistical Bulletin, June 2024), varying based on the purpose of the loan and the applicant's profile.
Interest rates are generally lower for online loans , thanks to lower operating costs and competition between digital platforms: in the third quarter of this year, the best APR for loans issued on the PrestitiOnline.it portal was 7,29%.
The increasing digitalization and innovation of the banking sector promise to make access to this form of credit increasingly easier, especially for young applicants.
But what aspects should be taken into consideration before deciding to resort to a personal loan? We will see it here with some practical advice.
- Evaluate your financial situation
Before applying for a personal loan, it is essential to assess your financial situation , since the bank checks the borrower's creditworthiness and ability to repay the amount before granting a loan.
A customer who has previously had insolvency issues or has been reported to the Central Credit Register, the Bank of Italy's information system that collects debt positions, may have difficulty obtaining financing. In any case, those with a permanent contract or who are retired can more easily access salary or pension loans (Cassa di Risparmio di Salario or Cassa Depositi e Prestiti), a type of loan that often offers lower interest rates than traditional personal loans.
- Specify the purpose to get better conditions
Although a personal loan is a form of open-ended financing, which doesn't require any justification for the use of the money, it's always advisable to declare the purpose of the loan to the lender, as banks and financial institutions may apply different interest rates depending on the purpose . A loan intended to raise funds without specifying its use may, for example, involve higher costs than a loan for a specific purpose, such as renovating a property or purchasing a car.
- Pay attention to the actual cost of the loan
It's not easy to determine the true cost of a loan when you consider that the first rate stated is the nominal annual interest rate (TAN), while the actual cost is actually measured by the APR (Annual Percentage Rate), which represents the actual cost you will incur, including additional costs such as application processing, brokerage, and installment management, as well as fees and taxes . Calculating the monthly payment must be based on the overall cost, and online payment calculators can be a significant aid in assessing loan payments and better planning the entire term of the loan.
Requesting a personal loan can therefore be an effective solution to cope with important expenses, but it is essential to proceed with awareness and make an informed and sustainable decision over time, comparing the offers on the market. Transparency on costs, attention to the APR and clarity on the purposes of the financing can make the difference between an advantageous opportunity and a commitment too onerous to sustain.
Interesting article on personal loan trends in Italy. It is important to carefully evaluate your financial situation before applying for financing.