HARTFORD, Conn. (WFSB) – More Americans are turning to personal loans to cover everyday expenses as inflation continues to strain household budgets, according to a new study by LendingTree.
Last month, inflation hit its highest levels in three years. As gas stays over $4 and the cost of groceries and rent keep going up, paying for necessities is getting harder.
LendingTree found 8.4% of people using their site to search for loans said they needed the money to pay for regular bills. While that number may sound low, it’s more than double what it was in 2023, when only 3.4% said paying bills was the reason for needing a loan.
Matt Schulz is LendingTree’s chief consumer finance analyst.
“It’s just further proof that there are an awful lot of people who are really struggling in the face of inflation and ongoing high prices, and who are looking for a way to help extend their budget a little bit and give them a little more financial wiggle room,” Schulz said.
For the people in Connecticut who requested a loan for everyday bills, the average requested loan was for $5,629 and the average credit score for the borrower was 579. A 579 score is considered bad and borrowers will end up paying a higher interest rate.
Schulz said before taking on this type of loan, people should consider asking for help.
“If you know that you’re not going to be able to pay a bill soon, or you suspect that’s coming, the sooner you reach out to your lender or creditor, the better,” Schulz said. “So many lenders and creditors have hardship programs that they can use to help people who are going through a short-term financial rough patch, but chances are, you’ll never know about them if you don’t ask.”
If taking out a loan, Schulz said it’s important to shop around to make sure you get the best rate.
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