Consumers with student loan debt are more likely to use credit cards and turn to personal loans for help with holiday spending.
AUSTIN, Texas, November 7, 2017 — A new survey by Student Loan Hero, a leading financial news and education site, finds that those with student loan debt are likely to spend more money this year than last year — and pay for more of their holiday expenses using debt.
According to the survey, 55 percent of student loan borrowers expect to increase their holiday spending from what they spent in 2016. This is compares with 37 percent of those without student loans who plan to spend more than they did last year. Some of those with student loan debt even considered skipping a student loan payment so they can better afford holiday spending.
Additionally, while 45 percent of respondents without student loan debt plan to use a credit card for their holiday shopping, that number jumps to 69 percent when looking at those with student loan debt. About one-third of those with student loan debt expect to spend more than $500 on a credit card to cover holiday expenses.
“People who already have debt are more likely to continue using debt,” said Daniel Levine, a trends expert and director of the Avant-Guide Institute, a global trends consultancy. He added that those with student loan debt aren’t just more comfortable with the idea of debt. “They also might feel like credit cards or personal loans are their best options because student loan payments take such a huge chunk of their disposable income.”
- 45 percent of all respondents said they planned to spend up to $500 for the holidays this year, and 20 percent said they planned to spend more than $1,000. Only 14 percent of respondents said they weren’t spending any money this holiday season.
- Almost half (41 percent) of respondents put their holiday shopping stress level at 7 or above on a scale of 1 to 10.
Creating rules around holiday spending
- 74 percent of respondents said they create rules around holiday spending. Of those with student loan debt, 82 percent create rules designed to help them manage their holiday spending.
- 48 percent of all respondents chose a set amount to spend on each person for gift-giving. However, a significant number (21 percent) said they feel comfortable spending less on people closest to them who know they’re trying to save money or pay off debt. On the other hand, 33 percent spend more on those closest to them to “show they care”.
Consumers are willing to sacrifice for holiday spending
- 21 percent of all respondents said they would set spending limits on entertainment or travel to rein in holiday-related costs.
- The top items respondents said they would be willing to give up in order to save money during the holidays include going out to eat (53 percent), vacation or travel (49 percent), and drinking (43 percent).
Other debt used for holiday spending
- 18 percent of respondents without student loan debt have used personal loans to pay for holiday expenses. Among those with student loan debt, however, 33 percent have taken out personal loans.
- 40 percent of those with student loan debt have thought about skipping a student loan payment to afford holiday expenses.
Student Loan Hero conducted this survey via Survey Monkey on October 11, 2017, and collected responses from a nationally representative sample of 1,050 adults living in the United States. The survey results have a margin of error of ±3 percent.
About Student Loan Hero
Student Loan Hero combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage and pay off their loans. Student Loan Hero has helped more than 150,000 borrowers manage and eliminate over $3 billion in student loan debt since 2012 and assists over 3.5 million people in becoming more financially healthy every year.
Student Loan Hero offers both current and former students free loan calculators as well as unbiased, personalized advice and repayment plans through an easy-to-use online dashboard.
Founded in 2012 by CEO Andrew Josuweit, who himself had over $100,000 in student loans, Student Loan Hero operates on the belief that all loan help and recommendations should come with honesty and no hidden agenda.
For more information, visit negasonic.studentloanhero.com.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
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Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
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Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
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