Why people use them – Businesses

The pandemic has turned the lives of many people upside down: some have managed to maintain and increase their income, while others, unfortunately, have partially or totally lost them. Therefore, it is not surprising that people started looking for additional income opportunities and taking out personal use loans to stay afloat in one way or another: some for home repairs, others for medical services, etc.

Laina Finance experts shared interesting information: more than 25% of people applied for personal loans in order to improve their living conditions. And this is completely understandable because a large number of Europeans have switched to telework from home. It is also interesting to note that women started taking out personal loans more often than men.

Let’s take a look at how people’s spending has changed in the face of the pandemic, and why people have started taking out personal loans.

Home improvement

As we said above, it has become the most common reason for taking out personal loans in 2020-2021. This trend is also expected to continue in 2022. People had more free time, they started spending more time at home, so the desire to improve their living conditions became number one. From repairs to buying new furniture and decorations, that’s what people are willing to spend their money on right now.

Self-care

Medical bills have become the second reason for personal loans during the pandemic. People in Europe began to care and worry more about their health, to undergo more examinations and to see doctors, to buy large amounts of medicines and vitamins – all of this led to an increase significant monthly expenses. The attitude of people towards their health has changed, and as a result, many have stopped saving on themselves.

Here we can also add expenses for self-care procedures and fitness. Anything that can provide health, body and appearance benefits has become a priority for many.

Debt consolidation

The third reason for personal loans is the consolidation of past debts. Ultimately, many became more mindful of their finances and decided to take out new personal loans with lower interest rates to pay off previous loans with higher interest rates. This has simplified the entire payment and debt settlement system, and has also led to significant savings for many.

Vehicles

Buying a vehicle is the next reason for a personal loan. Here, too, everything is quite understandable – many people began to have more time for personal affairs, for meetings with relatives, etc., and at the same time, the need to use public transport in daily decreased. In addition, many have started to give up using public transport in order to take care of their health and have less contact with other people.

In addition, the car is not the only popular option – bicycles, electric scooters have become the buying leaders.

Auto repairs

We never know how much of the car service bill we will receive next month. In addition, the car can break down at the most unexpected moment. If there is no savings, personal loans come to the rescue. It became the fifth reason people took out loans in 2020-2021.

Education

Due to the fact that the incomes of many people decreased, they began to look for other ways to earn money and began to purchase various educational courses, seminars and lessons to improve their skills or master a new profession. The desire for self-education and skill enhancement became very common in 2020-2021, respectively, people began to look for opportunities to pay everything in the form of personal loans.