The coronavirus pandemic has deeply disrupted the U.S. economy, which in turn has hurt the incomes of many Americans. Businesses have been forced to lay off workers as they struggle to survive, and even though the job market has showed steady improvement over the past few months, the unemployment rate still sits at 8.4%. In addition, while all state economies are now at least partially reopened, spikes in COVID-19 have led some states to delay moving on to the next stage of reopening or even to close down businesses they previously reopened. It will take a long time to reverse the economic damage done by coronavirus, especially since Congress was unable to pass another stimulus package before the benefits from the first one lapsed. Consequently, many Americans need to borrow money to stay afloat.
Americans who are having trouble with their finances during the COVID-19 pandemic are searching for all sorts of options to relieve the pressure, from home equity loans to payday loans. However, people’s interest in getting these types of loans varies from state to state. In order to determine the states where people are searching for loans the most during the pandemic, WalletHub compared the 50 states and the District of Columbia across four key metrics. These metrics combine internal credit report data with data on Google search increases for three loan-related terms.
Greater interest in getting a loan indicates that more people in the state are struggling to make ends meet. It also implies there may be more strain on the state’s public assistance programs in the near future, and the state may experience a deeper recession than others will. Below, you can see WalletHub’s ranking of the states and D.C., along with a full description of our methodology.
States Where People Need Loans the Most Due to the COVID-19 Pandemic
‘Loan Search Interest Index’ Rank
‘Payday Loans Search Interest Index’ Rank
‘Home Equity Loan Search Interest Index’ Rank
‘Change in Average Inquiry Count’ Rank
|38||District of Columbia||47||33||29||27|
Ask the Experts
The coronavirus pandemic and the resulting economic hardship have led to a surge of interest in taking out loans. To provide additional guidance to loan-seekers, WalletHub turned to a panel of experts. Click on the experts below to view their bios and responses to the following key questions:
- What are the long-term implications of taking a short-term loan in the context of the current economic crisis?
- What are the safest borrowing options for people in need of quick cash for financial emergencies?
- As the coronavirus pandemic has put millions out of work and overwhelmed the unemployment offices, what policy interventions can be taken by local authorities in order to help those in need financially during this economic downturn?
Ask the Experts
In order to identify the states where people need loans the most during the coronavirus pandemic, WalletHub combined internal credit report data with data on Google search increases for three loan-related terms in the 50 states and the District of Columbia.
The analysis compares loan-related search interest values for August 2020. Values were calculated on a scale from 0 to 100, where 100 is the location with the most popularity as a fraction of total searches in that location. A value of 50 indicates a location which is half as popular. A value of 0 indicates a location where there was not enough data for this term.
- Change in Average Inquiry Count August 27, 2020 vs. January 1, 2020: Full Weight (~25.00 Points)
- “Loan” Search Interest Index: Full Weight (~25.00 Points)
- “Payday Loans” Search Interest Index: Full Weight (~25.00 Points)
- “Home Equity Loan” Search Interest Index: Full Weight (~25.00 Points)
Sources: Data used to create this ranking were collected from Google Trends and WalletHub data.
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