“A personal loan is often an unsecured form of debt, meaning the funds aren’t backed by an asset such as a house or car, and has a fixed repayment term. There’s no collateral requirement, which is why the loan comes with an interest rate that is usually higher than rates on secured debt. Still, these loans are becoming an increasingly attractive way to borrow and include relatively loose restrictions for how the funds may be used. Personal loans can be used for everything from a medical procedure to the purchase of a horse. They are extremely flexible, and the more people learn about them, the more open they are to the idea.”
Personal loans are on the minds of many Americans this year, a new Bankrate.com survey has found.
Roughly 24 million consumers, equivalent to 10% of American adults, are either very likely or somewhat likely to take out a personal loan in the next 12 months, according to the latest Bankrate Money Pulse survey.
The survey was conducted Jan. 7-10, 2016, by Princeton Survey Research Associates International and included responses from 1,003 adults living in the continental U.S. The margin of error is plus or minus 3.6 percentage points.
The millennials surprise
Among those 10% of American adults who are considering a personal loan in the not-too-distant future is a sizable chunk of millennials. Almost 1 in 5 — 18% — of 18- to 29-year-olds say they’re very or somewhat likely to use a personal loan this year.
That surprises Michelle Dosher, who is managing editor at the Credit Union National Association in Madison, Wisconsin. She says a popular belief is that most millennials are debt-averse.
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“Other findings are that they’re trying to not take on too much debt, especially if they’re already paying on a student loan,” she says.
The Bankrate survey also shows that interest in personal loans decreases as consumers get older.