Personal loans are without a doubt one of the most popular forms of financing, as the latest reports show that more than ten percent of US adults had an outstanding personal loan in 2018.
Are you thinking about going back to college? Maybe you are looking to buy a new car. Perhaps, you and the significant other are looking into buying your first home. Whatever the situation is, there is no denying that all of these scenarios are very exciting. Of course, these are purchases that aren’t going to come without some challenges.
Challenges like getting approved for a loan. Personal loans are without a doubt one of the most popular forms of financing, as the latest reports show that more than ten percent of US adults had an outstanding personal loan in 2018. Maybe you are one of those individuals that had one of these loans. Maybe you are thinking about taking a loan out in the near future. Either way, it is more than important to understand how your loan balance can compare to that of your peers.
The scenario above describes personal loans like car loans, mortgages, or student loans. It is true that the two are somewhat similar, but they also vary greatly. To start off, when you take out a loan for a car, home, or to go back to school, this loan is typically secured by the house or vehicle. This means that the bank or lender of the finances will have some controlling say over the property. If you fail to make the payments then the bank or lender can come and take back the car or home.
This is not necessarily the case at all with personal loans. Personal loans are an unspecified amount of money that can be used for any purpose. If you want to use the money to take a fishing trip, you have that option. Maybe you want to use the money to build a new garage. Well, you have that option with a personal loan.
According to reputable lenders like HittaSMSLån the average personal loan balance in 2018 was a little over $15,000. Of course, this is just the average and it doesn’t mean that there aren’t some age groups out there that accrue more debt over time. The average debt for most late teenagers in 2018 was $4,000, while most 30-year-old individuals racked up nearly $12,000 in debt. It seems that the highest debt can go to senior between ages 60 and 70. This age group alone racked up a debt of nearly $20,000. Maybe this had something to do with retirement. Perhaps, it had something to do with medical expenses. As of right now, the reasons for the loans are unclear.
Personal loans are a great way to get money when you need it quick, but there are plenty of downsides to them. This is especially true if your balance is above average. If the loan is above average it means that just paying what you owe will end up eating away at your reserves, while trying to pay down these interest will further rob you of any hopes of saving money.
Are you impressed, have any concerns, or think we can improve this article? Comment below or email us.