LendingClub and PYMNTS Third Report Finds Personal Loans Have Become a Mainstream Financial Tool for Americans
The first report found that the majority of Americans (54 percent) are living paycheck-to-paycheck; the second edition examined regional differences and found that Americans living in the
The key takeaway: Personal loans have become a mainstream financial tool for Americans, with paycheck-to-paycheck consumers increasingly contributing to the demand.
The Demand for Personal Loans is Here to Stay
The report finds that 24 percent of consumers in the
The research indicates that not all paycheck-to-paycheck personal loan holders are alike. Fifty-seven percent say they do not find it difficult to meet their financial obligations, while 43 percent have difficulty paying their bills. The latter group are 12 percent more likely than the former to have used personal loans.
The prevalence of living paycheck-to-paycheck among personal loan holders suggests that personal loans have become a mainstream financial tool for Americans, with paycheck-to-paycheck consumers increasingly contributing to the personal loan demand. This report further supports that Americans' need for credit fluctuates depending on their evolving circumstances and ability to prepare for the unexpected.
"Personal loans have become a ubiquitous financial management tool for Americans in their pursuit to tackle debt and manage their cashflow so they can build savings and plan for the unexpected," said
These findings build off of
Personal loans are helping Americans bridge the gap between income and saving levels. According to the research, 53 percent of personal loan holders surveyed say they have less than
"We've seen some members take out a personal loan to pay off credit cards or consolidate debt, and choose to keep funds in savings, and while some may be financially vulnerable, most are preserving their nest egg and servicing their debt obligations at the same time – that's a good thing," continued Nayar. "Others use it to reduce their cognitive load in terms of managing various bills. Overall, we find that the common goals are to get out of debt and pay less on their debt, both of which are more attainable with a personal loan."
The report continues to find that consumers living paycheck to paycheck across all age groups are much more likely to use personal loans than those with greater financial security. In addition, living with a child coincides with higher rates of personal loan acquisition as well, and demand is highest among Gen X and millennial consumers.
To view the full report, visit: https://www.pymnts.com/study/credit-access-paycheck-to-paycheck-consumers-personal-loans-finance-millennials-savings
Reality Check: The Paycheck-To-Paycheck Report, a PYMNTS and
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