The need breakdown is even more illuminating. Only 26% of consumers said they have a discretionary need for the money, such as making a home improvement or paying travel expenses.
All the rest have more basic needs for cash, with 32.5% of respondents saying they need the money just to pay bills. More than 12% said they needed to buy a car or make car repairs.
Of the people who needed a loan, 21.1% earn between $50,000 and $75,000 while 32.6% earn $75,000 or more.
The nationwide survey via Survey Monkey was part of an exclusive report from ConsumerAffairs researchers who also studied internal data from consumers. In addition, they analyzed Google search trends and found longer-term evidence of consumers’ growing need to take on debt to make ends meet. More than 88,100 consumers searched in November 2022 for “I need a personal loan now,” “need money now” and similar terms.
These searches rose 18% over 12 months and have risen 41% since November 2019, when 62,512 people typed in those keywords.
Living paycheck-to-paycheck
The report found good reason consumers are feeling the need for extra cash. Inflation has pushed consumer prices up 6.4% year-over-year, with higher costs for everything from food to gasoline to rent.
If incomes stayed the same, simple math would suggest that a household would not be able to afford all the things it had purchased previously. Personal finance guru Suze Orman recently disclosed that a survey by her company, SecureSave, found that 74% of Americans were living paycheck-to-paycheck in November.
The ConsumerAffairs survey confirmed that about 60% of Americans found it more difficult or were unable to pay all monthly bills in the past year. Among those who said they needed a personal loan, that figure rose to over 75%.
The report analyzed responses collected from 247,700 consumers who, from March 2022 to January 2023, used a ConsumerAffairs online tool to get information about potential personal loan providers.
The survey found that 21.5% of consumers interested in a personal loan would use it to pay bills while 28.5% would use it to consolidate high-interest debt from credit cards. In recent months, the fraction of consumers who needed a loan to consolidate debt rose to over one-third.
The nationwide growth in credit-card use to pay inflation-spiked bills and cover unexpected expenses is driving the need for lower-rate personal loans, the report found.