States Where People Need Loans the Most Due to Coronavirus

Adam McCann , WalletHub Financial WriterSep 30, 2020

states where people need loans the most due to the coronavirus pandemic

Adam McCann , WalletHub Financial Writer
Sep 30, 2020

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.

Table of Contents

Main Findings

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States Where People Need Loans the Most Due to the COVID-19 Pandemic

Overall Rank	State	‘Loan Search Interest Index’ Rank	‘Payday Loans Search Interest Index’ Rank	‘Home Equity Loan Search Interest Index’ Rank	‘Change in Average Inquiry Count’ Rank
1	New York	5	2	3	13
2	Virginia	24	12	7	2
3	Washington	14	15	12	8
4	Pennsylvania	15	7	13	15
5	West Virginia	7	3	33	16
6	Michigan	5	12	9	32
7	Florida	38	7	8	14
8	Oklahoma	19	5	21	19
9	South Carolina	19	14	11	20
10	Alabama	15	31	5	12
11	Connecticut	40	16	1	21
12	Kentucky	10	16	19	18
13	Minnesota	24	43	2	6
14	Kansas	15	9	6	39
15	Indiana	24	23	4	26
16	Maryland	3	37	32	9
17	New Jersey	22	9	16	36
18	Georgia	38	20	22	5
19	Ohio	10	16	22	33
20	Colorado	43	27	19	1
21	Utah	7	37	14	28
22	North Carolina	24	27	29	7
23	Massachusetts	35	6	31	22
24	Iowa	7	45	10	25
25	Arizona	31	1	40	34
26	Louisiana	28	46	18	3
27	Arkansas	31	30	28	10
28	Oregon	35	31	34	4
29	Texas	31	22	35	17
30	Illinois	35	27	17	35
31	Mississippi	15	41	22	29
32	Wisconsin	10	44	26	31
33	Tennessee	28	19	45	11
34	Delaware	2	40	41	42
35	Nevada	23	33	35	24
36	Missouri	13	25	46	23
37	California	43	33	15	30
38	District of Columbia	47	33	29	27
39	Idaho	46	20	25	43
40	Nebraska	31	39	37	40
41	Hawaii	50	4	42	47
42	Maine	49	41	37	37
43	South Dakota	1	47	47	38
44	New Mexico	4	33	47	49
45	New Hampshire	47	23	43	44
46	Rhode Island	28	26	44	51
47	Vermont	40	47	26	45
48	Montana	42	47	39	41
49	Wyoming	51	11	47	46
50	North Dakota	19	47	47	48
51	Alaska	43	47	47	50

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

Jesus M. Salas
Ph.D. – Associate Professor of Finance, Perella Department of Finance, Lehigh University School of Business
Read More

P.V. Viswanath
Ph.D. – Professor of Finance, Lubin School of Business, Pace University
Read More

J. A. Connell
CPA, CGMA – Associate Professor of Business, Stephens College of Business, University of Montevallo
Read More

Frank H. Shafroth
Director, Center for State and Local Government Leadership, George Mason University
Read More

Methodology

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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