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Americans' Attitude to Loans: Some Facts and Official Statistics

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Ali Man
Americans' Attitude to Loans: Some Facts and Official Statistics

A lot of Americans are buying items using loans. You can hardly find the average American who has no debt obligations. Even those who have no credit card debt or who pay all their monthly debts in good faith are likely to have a mortgage on their home or car. There is no doubt that good credit is crucial for getting many important things in your life. The thing is, there are a lot of sufficient reasons for deciding to say YES to personal loans over the phone or any other one. Well, you should understand that loan is a key method to determine if you are a trustworthy person for the time being. Thus, you need to make sure you have a good credit history.

#1 Payday Loans

Some people have experienced the situation when it is an emergency for them and they need money right now. Thus, payday loans are the best solution for them. A Payday loan is a short-term credit which is based upon your income you will get from your next salary.

12 million Americans use payday loans each year. Furthermore, ‘’Twelve million American adults use payday loans every year. On average, a borrower takes out eight loans of $375 each per year and spends $520 on interest’’, according to Pewtrusts. Payday loans are good with their fast cash. They can provide money for you at least within 24 hours of requesting the loan. They are convenient for customers. There are a few reasons why people use payday loans:

  • To cover credit cards or other expenses. Once of a sudden, you run out of all the money by the end of the month and you wish you could have more to buy some food. Or perhaps, you need to cover your credit card bills. 
  • Unexpected expense.  Your car may require an urgent repair or you have to cover the emergency medical expense
  • Your financial stability can sometimes feel out of range. It is not a big deal to experience a temporary cash collapse. 

#2 Car Loan

It is well known that buying a new car is considered to be a financial strain for the owners. It doesn't really matter whether you purchase a new car or a used one. Either of them can be pretty expensive. Therefore, a lot of people make a sound decision to get their dream car through a car loan.  The bottom line is to get a good car, perform proper verification to it, and have a decent way to finance it; people must find the best car loan.  In addition, we can see that auto loans are in high demand among Americans. Because it sets high records and the US citizens are currently dealing with roughly $1.18 trillion in car loans. It means an increase of 6,5 % compared with 2018 in the first quarter (source Experian). 

#3 Mortgage

Off the top of my head, you might want to own a house or a flat one day. Thus, you definitely will need to get a home loan, which is known as a mortgage. You should be aware that without credit or with a bad credit score- it will be hard for you to get a mortgage. According to Forbes,  only 40% of homes in the U.S. are free and clear of a mortgage. That means, 60% of the US homes still carry a home loan.  But the thing is, some states can have a much higher percentage of mortgage-free homes than others. 

All in all, taking all forms of credit you should beware of getting into debts. Borrowing is costly without the power of knowledge. On the other side, to get your dream job, buy a reliable car, or to get your first home you simply need to work on your credit. Say “yes” to credit and prepare yourself for the future.

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