Crisis or no crisis, currently German consumers do not let their buying mood spoil. Even the demand for luxury consumer goods is constantly increasing. In the meantime, many Germans have strayed from flying only on junk and bargains. The “avarice is cool mentality” has waned again. More and more consumers rely on luxury items when making their consumer decisions and if they don’t have the money, they take out a loan for luxury.
For some, this is simply a question of prestige, and others actually believe that if they surround themselves with luxury, they will be admired or envied by others. You can get jealous at times, but certainly only how naive some consumers are and how short-term their thinking is.
There are now luxury watch retailers and other luxury retailers where the luxury items do not necessarily have to be paid in cash. A luxury loan can be taken out and the purchase price paid in installments.
Who gets credit for luxury
Anyone who applies for a credit receives a luxury loan if it is creditworthy. This means that luxury items are now accessible not only to a small minority of the population, but also to the somewhat broader middle class. Only the Cream Bank receivers look back into the tube. They don’t even get credit for the simplest household items, and it would be a luxury for them if they could afford everyday things.
But when it comes to the loan for luxury, of course we mean a completely different target group. These are the would-be rich, who use luxury items that they want to finance with loans and try to pretend that they are “rich”. Actually, it’s all pretty poor and it should be almost forbidden to buy luxury on credit. If you want luxury, you should have the money for it.
Borrowed luxury is a new trend. This reflects the growing need of consumers to own prestige consumer goods. The loans for luxury hardly differ from other consumer loans, only that behind a 25,000 USD loan there is only one watch and no mid-range car. The would-be rich also prefer a long term so that the rates remain affordable. Nothing speaks against the principle of a long term when it comes to luxury financing, because a luxury watch hardly loses value.
Is it normal that even luxury is bought on credit? In the past, it was always the case that only the rich bought certain luxury items and then had no problem with financing. Today the women go from Hans Müller and buy a designer dress for 10,000 USD on credit. So you can ask yourself where that should lead.
There is no risk for the banks. Banks like to give credit for luxury because they know that such loans are less risky and that there is always a luxury item behind the loan that can be used in case of doubt. So if you have the appropriate credit rating, you can also take out a loan for luxury if you have no other worries.