[Survey] 31% of Canadians say they use personal loans to deal with financial emergencies
With inflation putting a strain on the finances of many Canadian households, personal loans represent an attractive solution for financing small to medium-sized expenses. That's why we wanted to find out how Canadians use personal loans, by asking them about their habits in this area. Thanks to the 911 respondents who took part in the survey, we can offer you this overview of personal loans in Canada.
Good to know
Key numbers :
- Only 17.5% of Canadians say they have used a personal loan in the past 10 years
- In Canada, 63% of personal loans are for amounts under $20,000
- Vehicle purchases alone account for 29% of personal loans taken out in Canada
- Almost 35% of Canadians see personal loans as a way to have flexibility in payments to spread out expenses
Only 17.5% of Canadians say they have used a personal loan in the past 10 years
First of all, we wanted to know to what extent Canadians use personal loans. The survey results reveal a significant majority, with 82.48% of respondents stating they have never taken out a personal loan in the past decade. However, a notable portion of respondents, 11.32%, indicated they have taken out a personal loan once during this period, suggesting a certain level of financial engagement. A smaller yet noteworthy subset, comprising 6.20% of respondents, admitted to taking out personal loans multiple times, indicating a recurring need for financial assistance or perhaps a different financial management approach.
Source : HelloSafe's exclusive survey
In Canada, 63% of personal loans are for amounts under $20,000
Among those who have used personal loans as a means of financing in Canada over the past ten years, what are the most common amounts borrowed? We asked them about it. The results tend to show that most personal loans taken out (62.67%) are for amounts under $20,000. In contrast, only 22.67% of personal loans taken out were for amounts between $20 and $50,000, compared with 14.67% for amounts over $50,000. These figures show that Canadians prefer relatively modest amounts, which validates the fact that this financing solution is most often used as a "top-up".
Source : HelloSafe's exclusive survey
Vehicle purchases alone account for 29% of personal loans taken out in Canada
Beyond the amounts borrowed, we thought it would be interesting to look at the type of goods or services financed by personal loans in Quebec. The leading reason, cited by 28.77% of respondents, was to purchase a vehicle, indicating a significant demand for transportation financing. Close behind, 26.03% of respondents reported using their loan to pay off other debts, underscoring a prevalent need for debt consolidation or management. A considerable 20.55% of respondents selected "Other," highlighting a diverse range of financial circumstances driving loan uptake. Furthermore, 10.96% of respondents took out loans to cover unexpected medical expenses, reflecting the pivotal role of healthcare costs in financial decision-making. Renovating homes (8.22%) and acquiring technological items (2.74%) were less common reasons, suggesting more specific financial needs among certain subsets of respondents.
Source : HelloSafe's exclusive survey
Almost 35% of Canadians see personal loans as a way to have flexibility in payments to spread out expenses
Finally, to complete this overview of Canadians' relationship with personal loans, we wanted to understand how they see their usefulness as a means of financing. The survey findings illuminate diverse perspectives on the primary purpose of personal loans. The majority, 34.72% of respondents, view personal loans as offering flexibility in payments, enabling the spreading out of expenses. Following closely, 30.56% see them as crucial for financial emergencies. Additionally, 23.61% selected "Other," indicating varied perceptions. A smaller portion, 8.33%, believes personal loans ease the purchase of expensive goods, while 2.78% consider them for occasional indulgence. These varied views underscore the multifaceted role personal loans play in addressing different financial needs and preferences.
Source : HelloSafe's exclusive survey
Methodology
This document is based on an exclusive survey conducted throughout January 2024 on the hellosafe.ca platform, in which 911 Canada residents participated, in accordance with current methodological standards and representative of the diversity of the Canadian society.
In addition to its expert editorial line around insurance and financial products, HelloSafe explores broader topics relating to global consumption in Canada and around the world. The aim is to decipher certain complex subjects for consumers and to provide everyone with the latest information. It is within this framework that HelloSafe regularly carries out studies on trends relating to current personal finance in Canada..
About HelloSafe Canada
HelloSafe is a leading platform for comparing financial products (insurance, credit, investments) in Canada. Powered by its unique and powerful technology, HelloSafe provides users with dozens of free and anonymous comparison tools, calculators and expert, up-to-date content. Its platform empowers users to make the best decisions for their wallets and find the right products at the right prices for them.
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