Consumers tend to take personal loans for large purchases and debt consolidation. This is according to a recent survey conducted by Experian, a global leader in consumer and business credit reporting.
As per the report, personal loans are expanding in the market at very fast rates. This is despite the fact there is only a small fraction of Americans have this kind of credit products.
74% of the consumers surveyed that didn’t have a loan explained there was something specific in their life causing them to consider taking out one in a period of five years.
According to 40% of the respondents, debt consolidation is one of the reasons they were considering to take a personal loan. This happens when individuals have large debt on their credit card balances and want to save some money on interest.
35% of the respondents said they are considering getting a personal loan for a home improvement project. While 27% would take a loan for a large purchase, 23% would use it to travel.
In addition to it, Experian surveyed 369 consumers who had already taken a personal loan. 28% of these respondents said they used it for large purchases, 26% for debt consolidation, 17% for home improvements, 9% to refinance existing debt and 30% mentioned they were using it for another reason.
In order to take these loans, 67% of these consumers used a conventional bank, 18% of the respondents used an online lender. The majority of the individuals that took a loan online were 44 years old or younger. Indeed, 25% of the participants between 18 and 44 used an online-only lender compared to 15% of those 45 and older.
6% of the surveyed individuals explained they got their personal loan through a credit union due to lower rates. The report explains:
“Among the consumers surveyed that were either considering or had already taken a personal loan, the responses showed that consumers consider personal loans to be a versatile tool that they can use in times of need.”
Several consumers are considering taking a loan due to large purchases and debt consolidation. With the current offer of new P2P loans services, individuals can select among a wide range of loan providers, meaning there is also a larger possibility of finding more attractive proposals.