Discover Personal Loans recently conducted a survey of 2,000 consumers in order to gauge overall feelings about personal loan products. According to a Discover press release, the survey was commissioned by Discover and conducted by independent research firm Rasmussen Reports. The results shed some positive light on personal loans in general.
According to the results, 68 percent of people who to had personal loans said that taking out the loan helped them reach a financial goal. Additionally, 70 percent said that taking out a personal loan helped them feel more financially responsible.
22 percent of personal loan borrowers claimed that the greatest benefit of a personal loan was the low interest rate, while 21 percent said the biggest benefit was the immediate access to funds. Other mentioned benefits included the lack of required collateral, fixed interest rates, and fixed monthly payments.
The survey asked respondents why they took out personal loans.
Over a quarter of the respondents cited a medical expense as the reason for the loan. 22 percent used their personal loan for debt consolidation, and only 13 percent used the loan to fund a small business.
According to Matysik, over half of the people surveyed had less than $5,000 in savings to cover unexpected expenses. “Personal loans can be used in a number of different ways to help people save money and reach their financial goals…A personal loan can be a smart financial tool to cover those costs.”
The survey also asked respondents what details they considered most while looking into personal loan products and options.
43 percent of survey respondents said they were most concerned with obtaining a low interest rate. 16 percent were concerned with the repayment terms, and 15 percent wanted to know how much the monthly repayments would cost. 18 percent of people also claimed that trustworthiness is the most important factor in choosing a lender.
The individuals who have previously taken out personal loans cited the interest rate as the most important factor in choosing a lender. This was consistent across all age groups.
However, some responses differed across age groups. 19 percent of respondents between the ages of 23 and 29 chose fees as the most important factor for choosing a lender, while 18 percent said the available loan amount was the most important factor. However, for respondents aged 65 and older, only 12 percent considered the fees or loan amount to be the deciding factor when choosing a lender.
Personal loans are part of a growing business. According to the latest data from TransUnion, nearly 16 million Americans have a personal loan. Five years ago, less than 10 million Americans used personal loans.
Author: Andrew Rombach
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