Weddings in the Northeast? Vacations in the South? LendingTree Analysis Reveals How Personal Loan Purposes Vary by Region
Those are some of the findings from a new analysis of seasonal and geographic variations in loan types by LendingTree®, the nation's leading online loan marketplace. The company examined the selected purposes for personal loan requests made on
"We know that debt consolidation and credit card refinancing are the most common purposes for personal loans regardless of season or location, but we really wanted to examine all the other reasons people utilize personal loans, and to confirm how geography or seasonality factors into those requests," said
More than 2.6% of loan requests coming from Northeastern states are earmarked for nuptials, the highest percent of any
A little more than 3.4% of Southerners who request loans do so to cover their vacation costs (national loan offer average: about
Loan requests fit into one of thirteen types, with debt consolidation (39.6%) and credit card refinancing (15.9%) being the most commonly-cited purpose for requesting a personal loan. The others in order of national popularity are: car financing (8.0%); home improvement (7.3%); moving and relocation (7.3%); medical expenses (5.0%); major purchases (4.8%); vacations (3.1%); business (2.7%); wedding expenses (2.1%) and green loans (.8%).
Loan requests from those in the Western states are more commonly sought for business purposes, and in the Midwest loan requests skew inordinately toward major purchases which could be anything from college tuition to major home appliances.
"By studying the purposes behind personal loan requests, we're able to pull back the curtain on the economic disparities and regional differences in financial priorities we see in this country," said Lebda. "Places where people typically have higher incomes and more business startups, like the West, are leveraging more personal loans to start or grow businesses. Southern states, which tend to have slightly lower household incomes are using personal loans to help with medical bills more than other US regions."
Seasonal loan variations
Loan requests also vary according to the calendar, to reflect the ebbs and flows in the financial choices people make seasonally.
Wedding loan applications, for example, rise in the spring and summer, along with vacation loan requests, aligning with peak seasons for both activities (biggest percent for each loan type highlighted).
Loan Purpose |
Winter |
Spring |
Summer |
Fall |
Business |
3.09% |
3.33% |
2.33% |
2.37% |
Car Financing |
8.00% |
9.01% |
7.66% |
7.69% |
Credit Card Refinance |
16.02% |
14.45% |
16.61% |
16.18% |
Debt Consolidation |
38.99% |
38.21% |
39.78% |
40.57% |
Green Loan |
1.04% |
0.67% |
0.68% |
0.85% |
Home Buying |
4.34% |
3.69% |
2.73% |
3.52% |
Home Improvement |
6.95% |
7.96% |
7.29% |
7.10% |
|
4.92% |
5.16% |
4.61% |
4.55% |
Medical Expenses |
5.11% |
4.73% |
4.77% |
5.21% |
Moving and Relocation |
6.96% |
7.08% |
7.46% |
7.43% |
Vacation |
2.66% |
3.28% |
3.81% |
2.55% |
Wedding Expenses |
1.9% |
2.4% |
2.3% |
2.0% |
"Access to credit is expanding, due in part to technology and more online lending platforms, which is great news for consumers" said Lebda. "Personal loans can be a cost-effective way to finance certain expenses as long as you only borrow the necessary amount. Before taking on debt for any reason, it's crucial to understand the loan terms and to budget for the new monthly payments. Even though you may qualify for a loan, it may not always be the right financial choice for your situation."
Methodology
Regions:
Western region includes CA, AZ, CO,
Midwestern region includes IL, OH, MI, IN, MO, MN, WI, KS, IA, NE, ND and SD
Southern region includes TX, FL, GA, NC,
Northeastern region includes NY, PA, NJ, MA, CT, RI, NH, ME, VT and DE
DATA DETAILS
Loan Purpose by region (biggest percent of loan type highlighted)
Loan Purpose |
West |
Midwest |
South |
Northeast |
Total US |
Business |
2.87% |
2.30% |
2.87% |
2.56% |
2.70% |
Car Financing |
7.47% |
8.17% |
8.43% |
7.45% |
8.01% |
Credit Card Refinance |
17.55% |
15.74% |
13.99% |
18.75% |
15.91% |
Debt Consolidation |
42.83% |
40.16% |
38.61% |
37.71% |
39.55% |
Green Loan |
0.80% |
0.72% |
0.88% |
0.74% |
0.81% |
Home Buying |
2.14% |
4.81% |
3.61% |
3.26% |
3.50% |
Home Improvement |
4.98% |
7.76% |
8.13% |
7.29% |
7.30% |
|
4.48% |
4.81% |
4.90% |
4.69% |
4.77% |
Medical Expenses |
4.90% |
4.65% |
5.57% |
4.02% |
4.97% |
Moving and Relocation |
7.24% |
6.24% |
7.54% |
7.78% |
7.27% |
Vacation |
2.77% |
2.55% |
3.41% |
3.17% |
3.07% |
Wedding Expenses |
2.0% |
2.1% |
2.1% |
2.6% |
2.1% |
State with highest percent of each loan type
Loan Purpose |
% of loan |
Top State |
% of loan requests |
Business |
2.7 |
FL |
3.55 |
Car Financing |
8.01 |
KY |
9.69 |
Credit Card Refinance |
15.91 |
NJ |
20.68 |
Debt Consolidation |
39.55 |
UT |
50.44 |
Green Loan |
0.81 |
MS |
1.31 |
Home buying |
3.5 |
WV |
6.86 |
Home improvement |
7.3 |
WV |
12.88 |
Major purchase |
4.77 |
LA |
5.42 |
Medical Expenses |
4.97 |
WY |
7.26 |
Moving and Relocation |
7.27 |
DC |
11.4 |
Vacation |
3.07 |
DC |
5.99 |
Wedding Expenses |
2.1 |
LA |
2.8 |
Avg loan offered, by region and type (highest loan offered of each type highlighted)
Loan Purpose |
|
|
|
|
National |
Business |
|
$ 13,513.01 |
$ 13,525.99 |
$ 13,501.34 |
|
Car Financing |
|
$ 20,298.06 |
$ 18,117.02 |
$ 19,893.00 |
|
Credit Card Refinance |
|
$ 20,416.90 |
$ 22,215.54 |
$ 20,498.45 |
|
Debt Consolidation |
|
$ 22,384.04 |
$ 20,457.97 |
$ 22,035.25 |
|
Green Loan |
|
$ 10,757.31 |
$ 10,605.87 |
$ 10,794.25 |
|
Home Buying |
|
$ 13,919.07 |
$ 13,982.80 |
$ 14,032.87 |
|
Home Improvement |
|
$ 17,747.60 |
$ 18,120.62 |
$ 17,691.17 |
|
|
|
$ 12,879.54 |
$ 12,885.46 |
$ 12,882.11 |
|
Medical Expenses |
|
$ 44,035.17 |
$ 35,672.39 |
$ 32,302.35 |
|
Moving and Relocation |
|
$ 11,097.75 |
$ 10,552.51 |
$ 11,128.26 |
|
Vacation |
$ 8,568.02 |
$ 8,520.53 |
$ 8,483.32 |
$ 8,422.85 |
|
Wedding Expenses |
|
$ 11,090.23 |
$ 11,210.83 |
$ 11,173.88 |
|
Avg Requested loan amount (national)
Personal Loan Purpose |
Avg Requested |
% of Total Personal |
Business |
|
2.70% |
Car Financing |
|
8.01% |
Credit Card Refinance |
|
15.91% |
Debt Consolidation |
|
39.55% |
Green Loan |
|
0.81% |
Home Buying |
|
3.50% |
Home Improvement |
|
7.30% |
|
|
4.77% |
Medical Expenses |
|
4.97% |
Moving and Relocation |
|
7.27% |
Vacation |
|
3.07% |
Wedding Expenses |
|
2.1% |
About
MEDIA CONTACT:
704-943-8208
Megan.Greuling@lendingtree.com
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