Ireland has placed second in a study the most affordable European countries to take out a personal loan, with Luxembourg claiming the top spot.
Loan expert Lånea analysed data from Trading Economics, the Organisation for Economic Co-operation and Development and Numbeo to create an index of the European countries most affordable for those wanting to take out a personal loan.
Countries were placed in the rankings according to loan repayments as a percentage of disposable income.
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The group subtracted consumption expenditure per capita from the typical salary in each country, to calculate the disposable income. The total cost of a personal loan repayment of 10 per cent of the average salary (plus the national rate of interest) was then calculated as a percentage of the disposable income.
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Ireland placed in second, with a personal loan repayment of 19.27 per cent of the average disposable income, which equated to €399 per month. This was taken from a national interest rate of 4.5 per cent on top of a personal loan cost of €4,588.
This was determined with living costs of €21,000 deducted from the average salary of €45,885, revealing an estimated monthly disposable income of €2,073.
Luxembourg took top spot with a personal loan repayment of €626 per month, equivalent to 18.98 per cent of the average disposable income — the lowest in the study.
A spokesperson for loans experts Lånea said: “There are lots of things to remember when taking out a personal loan, and each person’s unique financial situation must be considered. Credit scores, interest rates and repayment terms are all things to keep in mind.
“Make sure you understand the purpose of your loan and form a plan on how you intend to use the funds. If necessary, look for lenders that offer flexible repayment options, and be aware of any additional fees or charges that may incur during the application process.”
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