Study: Hawai‘i has Lowest Personal Loan Debt in U.S.March 3, 2019, 3:30 PM HST (Updated March 3, 2019, 9:05 AM)
Personal loans are the fastest-growing form of consumer debt in the U.S.—outpacing auto, mortgage and student loan debt, according to Experian.
Currently, there are 36.8 million personal loan accounts held by about 10% of U.S. adults. The number of personal loans increased by 16% in the fourth quarter 2018—compared with 2017— totaling $291 billion.
Hawai‘i residents had an average personal loan debt of $12,638 in 2018. The highest national average was $232,877 in Manhasset, New York during the fourth quarter of 2018.
Most people apply for personal loans—a form of secured or unsecured credit—to consolidate debt or finance large purchases. Personal loans were once considered a last resort for people trying to manage large debts, but continuous economic growth and low unemployment rates may be changing that sentiment. Surging personal loans may also be attributed to the rise of online lenders and financial technology. According to Experian, a handful of startups account for more than 40% of new personal loan accounts.
Experian recommends that before applying for a personal loan, people should research their options to determine what kind of loan is right for them. The best offers will save on interest. People should also know their credit score and the terms of any loan they are considering: interest rates, length of the loan and the monthly payment.