The pandemic has prompted households to cut back on their use of overdrafts.
And demand for mortgages and consumer credit dropped in the initial phase of the outbreak of the virus before recovering, a Central Bank report found.
However, demand for lending by households remains below 2019 levels.
Households’ use of overdrafts dropped by 25pc between May and August this year.
Experts said this was because consumers have been spending less.
Meanwhile, worries about the impact of the pandemic have prompted people to be cautious about taking on debt.
The Central Bank said Covid-19 represents a substantial shock to households and the economy.
During the initial period of restrictions, more than a million individuals in the workforce were in receipt of State income supports, according to the Household Credit Market Report 2020.
The Central Bank said close to a fifth of all households reported lower income.
Mortgage approvals dropped 11pc in the year to August but the situation had been much worse earlier in the year.
In the year to May, the level of mortgage approvals had been down 62pc.
The credit report says 6.1pc of residential mortgage accounts were on a payment break in September.
Some households may require additional tailored supports as the payment breaks expire.
Many of them were due to end this month.
Those borrowers working in the sectors directly affected by restrictions tend to have smaller mortgages and lower incomes.
However they have high debts relative to their income, suggesting heightened vulnerability to the economic effects of the pandemic.
Four out of 10 of those on payment breaks had their repayment schedule restructured in the past.