Economic recovery lowers the price of personal loans

According to the latest data from the Labor Force Survey (EPA) of the National Institute of Statistics, there is a strengthening of the labor market and an increase in economic productivity. This translates into a clear improvement in national welfare and in the increase in the granting of personal loans since, according to the latest report of the Bank of Spain, the granting of loans increased by 17% during the last year.

Employment grows and the number of personal loans grows

According to the EPA data in the last quarter, there are 296,000 fewer unemployed than in the previous quarter, which means that unemployment stands at 22.4%, compared to 23.8% in the first quarter. It is the biggest drop in unemployment between quarters since 2005.

The sector that created the most employment this last quarter was the service sector with 292,000 jobs created, in line with the improvement of tourism data and other services that do not depend on tourism such as insurance, transport or telecommunications. The industrial sector has also increased employment, with 65,000 more jobs, in line with the growth of industrial production that has grown by 3.4% in annual terms. In addition, the industrial sector is characterized by creating more stable and skilled jobs, which will affect the recovery of the economy and the improvement of the Spanish competitive capacity.

This significant improvement in economic conditions in Spain has a significant impact on consumption data, since not only is the loan granted growing, but families are also requesting more loans for consumption. In April more than 2,500 million euros were granted in personal loans to families, 22% more than in the same period the previous year. Fixed rate personal loans between $2,000 to $35,000. 

Personal loans less than 8% APR

The greater concession of credits has caused that the lenders enter a war of prices, offering some greater advantages to their users. During the last few months, we have witnessed a steady drop in the price of many of the loans on the market, both from banks and private credit establishments, and it is becoming easier to find financing below 10% APR. 

Increase the quality of employment

It is the first time in 10 years that all sectors in Spain created jobs in the second quarter of the year. The data are taken from the Labor Force Survey not only indicate a quantitative improvement in the labor market, but also an improvement in quality :

  • Full-time employment increased by 430,000, while part-time jobs decreased by 18,500
  • The number of workers aged between 16 and 24 increased by 51,000
  • In the second quarter, the number of freelancers increased by 44,200, of whom 83% created jobs
  • The number of households where all members are unemployed decreased by 136,100. The lowest figure since 2011

Although these data indicate a clear improvement we must take into account the increase in temporary jobs, which increased by more than 300,000 positions, compared to the small increase in permanent jobs that only did so in 60,800.