Equifax data shows strong demand for unsecured credit, while buy now pay later growth eases and mortgage demand continues to fall 

Equifax Quarterly Consumer Credit Demand Index: September 2022

  • Overall consumer credit applications increased (+17.1% vs September quarter 2021)
  • Credit card applications grew (+31.5% vs September quarter 2021)
  • Personal loan applications up (+22.0% vs September quarter 2021)
  • Buy now pay later applications increased (+9.9% vs September quarter 2021)
  • Auto loan applications reduced (-3.8% vs September quarter 2021)
  • Mortgage applications declined (-6.1% vs September quarter 2021)

Consumer credit demand experienced a significant increase in the September quarter, up +17.1% compared to the same period last year. The uptick was driven by surging growth in unsecured credit, according to the latest Equifax Quarterly Consumer Credit Demand Index (September 2022).

Released today by Equifax, the global data, analytics and technology company and leading provider of credit information and analysis in Australia and New Zealand, the index measures the volume of credit applications for credit cards, personal loans, buy now pay later and auto loans.

Credit card demand was a major driver of the overall growth, up 31.5% in Q3 2022 versus the same period 2021, while personal loan applications also saw strong growth (+22.0%).

Kevin James, General Manager Advisory and Solutions, Equifax, said: “As the cost of living increases and the impact of interest rate rises starts to hit home for many Australians, the buffer of household savings consumers accumulated over the past few years is starting to erode. In light of this, some consumers may be turning to unsecured credit to help them bridge the gap.

“According to Equifax data, demand for both credit cards and personal loans was highest in NSW, Victoria and the ACT. House prices in these states climbed rapidly during the pandemic, and many mortgage holders who bought at the top of the market haven’t had time to pay down their loans or build equity. This cohort is likely to be among the first to feel the pinch as interest rates rise.”

Mortgage demand declined -6.1% in Q3, continuing the downward trend that began earlier this year. Demand was down in all states except Western Australia and South Australia, which saw marginal increases. The steepest declines were seen in NSW, ACT and Tasmania.

Demand for buy now pay later eased in Q3, but was still up +9.9% compared to the same quarter 2021.

Auto loan applications declined in the September quarter, down 3.8% compared to the same period in 2021. 

Source: Equifax Australia