Personal Loans During Pandemic: What People Use Them For

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The pandemic has made changes in the lives of many people: some have managed to maintain and increase their income, while others, alas, have lost it partially or completely. Therefore, it is not surprising that people began to look for additional income opportunities and take loans for personal use to stay afloat somehow: some for home repairs, some for medical services, and so on.

Experts from Laina Finance have shared some interesting information: more than 25% of people applied for personal loans for the purpose of improving their living conditions. And this is quite understandable because a huge number of Europeans have switched to work remotely from home. There is also an interesting fact that women began to take personal loans more often than men.

Let’s see how the spending of the population has changed in the context of the pandemic, and what people began to take personal loans for.

Home Improvement

As we said above, this has become the most common reason for taking personal loans in 2020-2021. This trend will likely continue in 2022 as well. People had more free time, they began to spend more time at home, so the desire to improve their living conditions became number one. From repair works to buying new furniture and decorations — that’s what people are willing to spend their money on now.

Self-Care

Medical bills became the second reason for personal loans during the pandemic. The residents of Europe began to care and worry more about their health, undergo more examinations and visit doctors, buy large quantities of medicines and vitamins — all this led to a significant increase in monthly spending. The attitude of people towards their health has changed, and, accordingly, many have stopped saving on themselves.

Here, we can also add spending on 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 previous debts. The bottom line is that many have become more careful about their finances and have decided to take new personal loans with lower interest rates to pay off previous loans with higher interest rates. This simplified the entire system of payment and settlement of debts, and also led to significant savings for many.

Vehicles

Buying a vehicle is the next reason for a personal loan. Here, also, everything is quite understandable — many people started having more time for personal affairs, for meetings with relatives, and etc., and at the same time, the need to use public transport on a daily basis has decreased. Also, many began to abandon the use of public transport in order to take care of their health and to have fewer contacts with other people.

Moreover, the car is not the only popular option — bicycles, electric scooters have become the purchase leaders.

Auto Repairs

We never know how much the car service bill we will receive next month. Moreover, the car can break down at the most unexpected moment. If there are no savings, personal loans come to the rescue. This became the fifth reason why people took loans in 2020 – 2021.

Education

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

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