However, after the second wave, loan repayment trends returned to their usual rhythm, and in July the number of new loans issued increased by about 19%. According to experts, the additional funds temporarily reduced the financial strain for some households, but essentially did not change the financing needs of the population.
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“In the public space before the payment of the second pillar funds, there was no shortage of discussions that people would primarily spend this money on consumption. However, our data revealed a more complex picture: some clients used the funds to cover overdue payments and fully repay smaller loans, while others allocated part for purchases or kept it as a reserve,” says financial expert, head of Vivus Finance, Giedrė Štuopė.
The second wave – calmer than the first
According to the expert, the most noticeable change in people’s behavior was seen in April, when the number of early loan repayments more than doubled. The average amount of fully repaid loans at that time was about 9% lower than the first quarter average. This suggests that people who received additional funds primarily chose to fully cover smaller loans.
“Using additionally received funds to reduce financial obligations or cover overdue payments is a rational decision. A person reduces the monthly financial burden and at the same time the risk of facing greater difficulties in the future. On the other hand, the fact that debt repayment became one of the first priorities for some people also indicates a previously quite limited financial reserve,” says G. Štuopė.
After the second wave of payments, such a sharp surge in loan repayments was not recorded. In July, the number of early repayments exceeded the usual first quarter monthly average by only about 4%.
“This shows that the debt reduction impulse caused by the first wave was short-lived. After a few months, people’s behavior returned to the usual rhythm,” emphasizes the expert.
More people are borrowing, but amounts are not increasing
At the same time, another trend emerged in July – 19% more new loans were issued compared to the first half-year average. However, the average amount of newly issued loans did not change significantly. The growth is currently driven by a larger number of borrowing individuals, not by an increasing financing need per person.
“A one-time improvement in financial situation does not eliminate the usual financing needs of the population. A person may have money in their account but still choose to borrow for a specific purchase or larger expense. Some people may consciously keep withdrawn pension funds as a financial reserve. So, they provided short-term relief but did not change the long-term income and expenditure structure,” explains the financial expert.
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According to company data, there is currently not just one dominant borrowing purpose, but quite a wide range of everyday and larger one-time expenses. People borrow for home repairs or renovations, cars and their repairs, larger household purchases, and health expenses.
According to G. Štuopė, an increasing number of loans alone is not sufficient grounds to talk about a worsening financial situation of the population. Newly borrowing clients have been fulfilling their obligations more steadily and are delaying payments less frequently in recent months. The share of non-paying clients among new clients is about 4.5%, which is one-third less than the 2025 Lithuanian market average.
“A greater concern would be a combination of several indicators: if the average borrowing amount increased along with the number of loans, delays increased, and more people borrowed for essential daily expenses or new loans covered previous obligations. Currently, we do not observe this,” she notes.
What to expect in autumn?
According to G. Štuopė, as autumn approaches, some household expenses usually increase: preparation for the school year is replaced by heating costs, seasonal car expenses, and towards the end of the year, pre-holiday payments also add up.
“Financial pressure is usually caused not by one specific expense, but by several larger payments accumulating in a short time, especially if the household reserve is small. Considering the growth recorded in July, it is likely that the financing need will remain higher in autumn. However, there is currently no reason to predict an inevitably difficult autumn for all residents,” emphasizes G. Štuopė.
The expert advises people to calculate necessary monthly expenses and existing obligations before the more intense spending season, anticipate seasonal payments in advance, and, if possible, accumulate at least a minimal reserve.
“If at the end of the month there are constantly no free funds left, unexpected expenses always require borrowing, and financial obligation payments take up an increasing share of income, this is a signal to review your budget. A consumer loan can be a rational tool to finance a specific expense, but it should not become a permanent way to cover the difference between monthly income and expenses,” summarizes the financial expert.
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