Survey: About a Third of Americans Take Out Loans for Medical Treatment

Survey About a Third of Americans Take Out Loans for Medical Treatment

Americans take about a third of payday loans for urgent medical needs, according to the survey 2021. Common reasons for taking out loans for bad credit in CT are the desire to pay for car repairs, rest, pay for medical treatment, pay off debts. There are also “exotic” goals – investing in Forex and buying gifts to apologize to a girlfriend.

Americans take about a third of loans (35%) for medical needs when they urgently need cash until they get their next paychecks.

Financial experts analyzed more than 100,000 applications for unsecured short-term payday loans in 2020.

The second common reason why consumers applied for loans online is home renovation. This goal was indicated in 18.6% of applications.

Car repair is another common reason to take out a loan

“At the same time, money is actively borrowed not only for home renovations but also for the repair of cars,” says Igor Petrov, the company’s PR director.

8.2% of Americans take money for the repair and maintenance of cars, motorcycles and ATVs, including the purchase of spare parts and complex body repairs.
On holidays, they borrow money in 6.2% of cases. Basically, we are talking about buying gifts for birthdays and various significant dates.

7% of clients apply for debt consolidation loans

7% of consumers applied for payday loans to pay off existing loans.

Some of the clients’ requests are related to the need to borrow money on vacation. Approximately 4.2% of individuals take out such loans.

“Most often, this is the way to pay for last-minute tours”, financial experts say.

They borrow less often for treatment – in 3.2% of cases. The most common reason to borrow money for treatment is related to paying for dental services. Dental care accounts for more than a third of “medical” loans.

Other reasons why Americans took loans this year

There are also quite exotic reasons. Several hundred clients took money to buy theater tickets.

Around a hundred times, clients needed funds to apologize to a girlfriend after infidelity (this was the reason the Americans indicated) or simply after a quarrel, the study says.

10 times the money was borrowed to book a place in a restaurant for a birthday, and once the money was needed by the sailor, for the fees necessary to go to sea, the study says.

Some clients also took payday loans to work in the Forex market or to invest in other financial instruments.

The demand for relatively small loans (up to $1,000) is also observed in the banking sector. The purpose of such loans is to cover everyday or emergency expenses.

Credit cards are especially popular. “On average, one client now has 2-3 credit cards with relatively small limits,” experts say.

The main reason Americans go into debt is low incomes.

In 2021, according to all forecasts, the situation of the last year may repeat itself. According to the statistics department, in the first quarter, disposable income fell by 2.5%, in the second – by 0.1%. In the third quarter, they grew by 3%, which experts explained by a low base.

According to the official forecast for 2021, real incomes may grow by 0.1% at the end of the year. In the basic version of the macro forecast for 2021, the growth of real Americans is expected to be at the level of 1.5%.

At the same time, the auditors doubt the feasibility of this scenario, calling such estimates too optimistic.

At the end of the second quarter of 2020, the subsistence minimum per capita in the USA as a whole amounted to $150s, but 1.6 million Americans had incomes below this value.

The combination of falling solvency and growing interest in payday loans suggests that old loans are often repaid with new loans, that is
personal financial pyramids are being built in the hope of waiting out the recession in the economy and in the standard of living.

Experts do not foresee any significant improvements in the US economy in the near future. Officials are betting on the creation of reserves and on large infrastructure projects, which are unlikely to lead to a rapid rise in living standards.