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While many Americans dealing with the prospect of unemployment or reduced hours are struggling to meet their financial obligations, new research shows they are not turning to at least one type of loan for assistance.
According to new data from LendingTree, personal loan inquiries were at the lowest level of the year for the week of March 29. The decline was attributed to fewer people making luxury purchases and greater confidence in the ability to cover immediate expenses as a result of the multitrillion-dollar stimulus package passed by lawmakers.
As noted by the outlet, personal loans are a popular way to free up more cash through lower monthly payments and interest rates.
The top reasons people were seeking loans were credit card refinancing and debt consolidation – though even those inquiries were at their lowest levels of the calendar year.
Only inquiries from people with high credit scores – above 720 – were at their normal levels. Subprime borrowers, on the other hand, were asking for less than half the number of personal loans when compared with the outset of 2020.
Borrowers across the country appeared to be avoiding loans for discretionary purposes, as financial distress related to the ongoing coronavirus crisis affects large swaths of businesses and individuals.
Meanwhile, the government is preparing to deposit the first round of stimulus checks into people’s accounts at the outset of next week. The IRS will begin sending out paper checks via mail the following week.
The payments will be $1,200 per adult for those with adjusted gross incomes of up to $75,000. The threshold for married couples is $150,000 – they are eligible for $2,400 and $500 per child.
The relief is intended to hold Americans over until the U.S. economy is up and running again – the federal government and state governments have made the decision to shut down many businesses in an attempt to limit human-to-human contact amid the coronavirus. As a result, many people have either found themselves without a job or with reduced hours.