MADISON, Wis. (1/29/16)--Fox Business turned to the Credit Union National Association (CUNA) for expertise on personal loans for a recent article.
The article was based on a Bankrate.com survey that found roughly 24 million consumers, equivalent to 10% of American adults, are either very likely or somewhat likely to take out a personal loan in the next 12 months.
Michelle Dosher, CUNA’s consumer education department managing editor, provided Fox Business with valuable insights.
A personal loan is often an unsecured form of debt, meaning the funds aren't backed by an asset such as a house or car, and has a fixed repayment term. There's no collateral requirement, which is why the loan comes with an interest rate that is usually higher than rates on secured debt.
Dosher recommended that prospective borrowers assess their financial situation before applying for a loan.
"(Consumers) need to look at other debt obligations and make sure that they can afford that payment each month," she said.
Among those 10% of American adults who are considering a personal loan in the not-too-distant future is a sizable chunk of millennials. Nearly one in five--18%--of 18- to 29-year-olds say they're very or somewhat likely to use a personal loan this year.
That came as a surprise to Dosher, who told Fox Business that the commonly held belief is that millennials are debt-averse. "Other findings are that they're trying to not take on too much debt, especially if they're already paying on a student loan," she said.