The applicant for a private loan does not have to state the purpose of the loan. It is only in the case of the loan to collect small credits, and the lender offers to do this automatically, that the bank or credit institution needs to know what you need the money for. For this reason, it is not really clear how we Swedes think about private loans and how many loans you can put into each typical category such as loans for car purchases, loans for holidays, debt consolidation loans, and more.
Transparent loan markets
However, there is a loan platform that is transparent enough that you can see what purposes the private loans are intended to fulfill for those who apply for private loans. It is about the loan markets that are starting to grow a little here and there.
An example is Borrowfy, which is a kind of meeting place between private individuals who have a surplus of money and people who instead need to borrow money. Here, every potential borrower must specify the purpose of the loan, so that each lender can assess whether it is worth investing in it. With this model you can get quite a lot of information about how borrowers have intended to use their loans.
Debt consolidation is top notch
It is impossible to give exact figures on the number of loan applications within each major category, and in addition, Borrowfy’s figures are not fully representative of the private loan market as a whole. For example, there are probably some differences between Borrowfy and any major bank.
However, it may be a little interesting to take a closer look at Borrowfy’s figures to see which categories are overall and which are the most popular.
A review of Borrowfy’s loan applications in recent months indicates that the category “debt consolidation” is the one most borrowers use. The interest in taking private loans to collect more expensive credits is significantly greater than the interest in borrowing for holidays, buying a new car and moving. Exactly the “collateral loans” are also the ones that are on average at the highest amounts.
An informal leaderboard with summary information from Borrowfy can look like the following.
1. Debt consolidation (50% of loan stock)
2. Purchase of vehicle
3. Vacation trip
4. Move / buy furniture / divorce