Irish Personal Loans Hit Record €2.9 Billion in 2025, Driven by Cars and Home Improvements

New personal loans in Ireland reached a record €2.9 billion in 2025, according to Banking & Payments Federation Ireland (BPFI). This surge was primarily driven by car purchases and home improvements, despite subdued consumer sentiment due to elevated living costs and US trade policies.

Car loans totaled 78,977, valued at over €1.02 billion, marking a 19.3% increase in volume and an 18.6% jump in value. Home improvement loans rose 14% to 68,750, with their value increasing by 15.2% to €868 million. Other loans, including those for education, holidays, and special occasions, increased 21.7% to 125,523 agreements, also reaching €1.02 billion in value.

BPFI chief executive Brian Hayes noted that record drawdowns point to strong consumer confidence for major life purchases. While overall volumes and values were up, the average loan fell by €32 to €10,644 in 2025. The average car loan decreased by €73 to €12,853, but the average home improvement loan rose by €129 to €12,631.

This increase in lending occurred as the European Central Bank (ECB) reduced its headline deposit rate from 3% to 2% in the first half of 2025, after peaking at 4% in September 2024. Despite this, Irish consumer sentiment remained subdued for much of 2025 and fell to its lowest level in over three years by April, influenced by Middle East volatility and rising fuel costs.