Due to the economic impact of COVID-19, more and more Americans are taking out home loans and other types of loans, according to a new study from WalletHub.
“Americans struggling with their finances during the COVID-19 pandemic are looking for all kinds of options to relieve the pressure, from home equity loans to payday loans,” according to the report. However, people’s interest in getting these types of loans varies from state to state. In order to determine which states people are looking for loans the most during the pandemic, WalletHub compared the 50 states and the District. of Columbia through four key metrics. These metrics combine data from internal credit reports with data on Google search increases for three loan-related terms. “
Here’s what the researchers found:
Residents of these 10 states are most likely to apply for a home equity loan:
Connecticut, Minnesota, New York, Indiana, Alabama, Kansas, Virginia, Florida, Michigan and Iowa.
The report breaks down loan searches for 51 states.
For the report, WalletHub consulted several experts asking for their opinions on the relative safety of taking out loans of any type. None of them recommended looking for payday loans or even home equity loans, but instead recommended borrowing from family and / or acquaintances when possible, or from a cooperative of credit.
“If a person has a trusted financial institution or bank, I would suggest meeting with a loan officer to assess what the credit implications might be,” said Frank H. Shafroth, director of the Center for State and Local Government Leadership at George Mason University.
Wallet Hub also asked the experts “what policy interventions can be taken by local authorities to help financially those in need during this economic downturn?” To which Shafroth replied, “Adopt a policy that allows for postponement of foreclosures: This was a critical part of Detroit’s recovery from the nation’s largest Chapter 9 municipal bankruptcy – otherwise, forcing people out of their homes could expose them to more great risk of catching the virus and infecting many, many others.
The study can be viewed in its entirety on the WalletHub site.