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In the past year, 34% of Americans have taken out personal loans – that’s roughly 83.5 million people. Whether it be through an online lender or a good old fashioned bank, Baby Boomers, Gen X-ers and Millennials seem to have more in common when it comes to borrowing than they’d imagine.
With the help of our research provider, Pureprofile, finder.com surveyed 2,245 American adults to see how personal loans are being used in the US.
Emergencies happen. Bills stack up on top of each other. You realize the math you’re learning in school can’t begin to help you calculate what you’ll owe in tuition – and then you get into a fender bender on a sunny, Friday afternoon.
Accounting for 31% of borrowers, vehicle related expenses pull ahead – get it – as the top reason Americans are taking out personal loans. In the number two slot, 26% of people take out a personal loan in order to stay on top of bills. And then there’s the unfortunate 21% of people who landed in a pinch and needed extra cash for an emergency.
What else? Tuition for school doesn’t seem like that shocking of a reason 19% of people need personal loans. Finally, there are those gathering up their debts, melding them together and, hopefully, cashing in on a lower interest rate – making up for 15% of participants in our survey.
| Reason for loan | Percentage of people |
|---|---|
| Vehicle | 31% |
| Bills | 26% |
| Emergencies | 21% |
| Tuition fees | 19% |
| Consolidating debt | 15% |
Source: finder.com
Would women rather have a trip to the Bahamas or a new car?
It turns out that women use personal loans to buy vehicles, pay bills, pay tuition fees and to cover rent. Men, on the other hand, are more likely to use personal loans to consolidate debt, renovate their home, relocate, support their business, pay for medical bills and vacation.
| Males | Females |
|---|---|
| 36% have taken out a personal loan | 33% have taken out a personal loan |
| Consolidating debt, home renovations, business, medical expenses, moving homes, vacations | Vehicles, bills, tuition fees, rent |
Baby Boomers will likely say “Millennials” and Millennials will likely say “Baby Boomers.” They’re both wrong. Gen X-ers have an average personal loan amount of $8,592 – making them the largest demographic of borrowers.
According to our survey, loans fall anywhere between $50 to $200,000. In that vast range, the average loan is a modest $7,576. Baby boomers slightly exceed the norm, borrowing an average of $7,703. Millennials are only borrowing $7,046 per personal loan on average.
| Generation | Average loan amount |
|---|---|
| Baby Boomers | $7,703 |
| Gen X | $8,592 |
| Millennials | $7,046 |
Source: finder.com
When it comes to marital status, married couples take out slightly more than single and divorced borrowers. Numbers from our survey suggest that married or domestic partners have an average loan size of about $8,468. People who are single have a slightly smaller average loan size of $7,204 and those who are divorced borrow just $4,111 on average.
| Marital Status | Average loan amount | |
|---|---|---|
| Divorced | $4,111 | |
| Married or domestic partners | $8,468 | |
| Single, never married | $7,204 |
| State | Percentage taking loans | Average loan amount |
|---|---|---|
| Florida | 43% | $5,317 |
| Texas | 39% | $5,327 |
| California | 34% | $11,883 |
Source: finder.com
Here are six tips to eradicate a looming personal loan.
Source: finder.com survey of 2,245 American adults through PureProfile, July 2017
25.9% of adults take out a personal loan for their home renovations
On an average:
Interest rate: 10.57%
Term: 24 months
$2,990 principal borrowed
$312.72 in total interest accumulated
28.6% of adults take out a personal loan for their wedding
On an average:
Interest rate: 10.57%
Term: 24 months
$3,082.00 principal borrowed
$302.97 in total interest accumulated
47.10% of adults take out a personal loan to finance their small business
On an average:
Interest rate: 10.57%
Term: 24 months
$7,176.00 principal borrowed
$750.53 in total interest accumulated
10.57% of adults take out a personal loan for vacationing
On an average:
Interest rate: 10.57%
Term: 24 months
$1,159.00 principal borrowed
$1280.22 in total interest accumulated
24.50% of adults take out a personal loan for medical emergencies
On an average:
Interest rate: 10.57%
Term: 24 months
$958.00 principal borrowed
$199.20 in total interest accumulated
Allan Givens
Public Relations Manager
203-818-2928
allan.givens@finder.com
Nicole Gallina
Communications Coordinator
347-677-4931
nicole.gallina@finder.com
I need a personal loan for my vacations and for my tuition fees. Please help me.
Hi John,
Thanks for getting in touch with Finder. I hope all is well with you. 😃
If you need a personal loan and you are in the US, you may want to check this page.
On that page, you will see a table that allows you to conveniently compare your personal loans based on required minimum credit score, APR, and maximum loan amount. Once you found the right one for you, click on the “Go to site” green button to learn more or initiate your application.
If you are outside of the US, it would be a good idea to check your local area. Shop around until you find the right lender.
Please make sure that you’ve read the relevant T&Cs or PDS of the loan products before making a decision. Moreover, check the eligibility requirements as well and consider whether the product is right for you.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua