Dutch go cool on loans, but draw higher overdrafts
10 Feb '06
3 min read
Outstanding debt down for the first time in twenty years The increase in consumer credit has slowed down since 2001. This coincided with changes in the tax system in 2001, which made interest on loans for consumption purposes non-deductible.
Also, instead of taking out private loans, consumers now overdraw their current accounts or take out cheaper mortgages to create more financial leeway.
At the end of 2005 the total outstanding debt on consumer credit was 17.5 billion euro. This is just over 3 percent less than at the end of 2004.
The decrease in the result of lower amounts of credit granted in combination with higher repayments. It is the first time since 1985 that the outstanding debt on consumer credit fell on an annual basis.
In the period 2001-2004 the outstanding debt fell by an average 4 percent per year. From 1997 to 2000 this was still 9 percent per year.
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