LendingClub and PYMNTS Third Report Finds Personal Loans Have Become a Mainstream Financial Tool for Americans
SAN FRANCISCO, September 22, 2021 / PRNewswire / – LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, the leading digital market bank in the United States, today released the results of the third round of research Reality Check: Paycheck-To -Paycheck, conducted in partnership with PYMNTS.com.
The first report found that the majority of Americans (54%) live paycheck to paycheck; the second edition looked at regional differences and found that Americans living in the south-central region are the most likely to live paycheck to paycheck. This third edition examines the personal loan demand among Americans from paycheck to paycheck.
The main thing to remember: Personal loans have become a common financial tool for Americans, with paycheck-to-paycheck-to-paycheck consumers increasing demand.
The demand for personal loans is here to stay
The report finds that 24 percent of consumers in the United States have used personal loans. This makes personal loans the second most popular type of unsecured credit product after credit cards (which are used by 73%) and the fourth most common overall lending instrument after auto loans (50%) and credit cards. mortgages (45%). What’s more, according to research, nearly two-thirds of personal loan holders – 36 million people – live paycheck to paycheck.
Research indicates that not all paycheck-to-paycheck-to-paycheck personal loan holders are created equal. Fifty-seven percent say they have no difficulty meeting their financial obligations, while 43 percent have difficulty paying their bills. The latter are 12% more likely than the former to have used personal loans.
The prevalence of paycheck-to-paycheck-to-paycheck life among personal loan holders suggests that personal loans have become a common financial tool for Americans, with paycheck-to-check consumers increasingly contributing to demand. personal loans. This report further confirms that Americans’ need for credit fluctuates with changes in their circumstances and their ability to prepare for the unexpected.
âPersonal loans have become a ubiquitous financial management tool for Americans in their quest to tackle debt and manage their cash flow so they can build up savings and plan for the unexpected,â said Anuj nayar, responsible for the financial health of LendingClub. âDuring the COVID-19 economy, many Americans focused on reducing their overall debt instead of taking on more and personal loans were their tool of choice to help them manage their debts and gain financial stability. . “
These findings are based on LendingClub’s own data which shows Americans are prioritizing personal loan payments over their credit cards, in an effort to improve their overall financial health.
Personal loans help bridge the gap when savings are limited
Personal loans help Americans bridge the gap between income and savings levels. According to the study, 53% of personal loan holders surveyed said they had less than $ 2,500 in savings, suggesting they are financially vulnerable to emergencies or job loss. Looking at income levels, 68% of personal loan holders earn more $ 50,000 per year, 32% belonging to the highest income bracket (earning more than $ 100,000).
âWe have seen some members take out a personal loan to pay off their credit cards or consolidate their debt, and choose to keep funds in their savings, and while some may be financially vulnerable, most are preserving their nest egg and providing service. theirs at the same time, that’s a good thing, “Nayar continued.” 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, which is more achievable with a personal loan. “
The report continues to find that consumers living paycheck to paycheck in all age groups are much more likely to use personal loans than those with greater financial security. Additionally, living with a child also coincides with higher rates of acquiring personal loans, 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 collaboration of PYMNTS and LendingClub, is based on census-balanced surveys of 2,371 U.S. consumers that were conducted between July 15, 2021 and July 20, 2021, as well as an analysis of other economic data.
LendingClub Corporation (NYSE: LC) is the parent company of LendingClub Bank, national association, FDIC member. LendingClub Bank is the leading digital market bank in the United States. Members can access a wide range of financial products and services through a technology-driven platform designed to help them pay less when they borrow and earn more when they save. Since 2007, over 3.5 million members have joined the Club to help them achieve their financial goals. For more information on LendingClub, visit https://www.lendingclub.com.
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SOURCE LendingClub Corporation