By Dave Lemery | The Center Square
Americans may be looking to take out loans to get by during the coronavirus pandemic, but it looks like Granite Staters are less prone than most to turn to that option.
That’s according to a new report from WalletHub, which published an analysis that looked at a set of metrics for each of the 50 states to rank them by how much their residents are seeking help from lenders. New Hampshire came in 43rd overall in the rankings, meaning its residents were seen as less likely to be eying loans.
“[W]hile all state economies are now at least partially reopened, some states have paused further reopening due to spikes in COVID-19,” WalletHub’s Adam McCann wrote. “It will take a long time to reverse the economic damage done by coronavirus, and consequently many Americans need to borrow money to stay afloat.”
WalletHub’s overall metric consisted of four broad categories, and New Hampshire’s was in good company in three of the four, as bigger numbers were better:
• Loan Search Interest Index: 31st
• Payday Loans Search Interest Index’ Rank: 14th
• Home Equity Loan Search Interest Index’ Rank: 43rd
• Change in Average Inquiry Count’ Rank: 45th
“Credit cards are best for short-term borrowing and continuous purchasing power, while personal loans provide a longer-term solution and often have lower APRs,” WalletHub analyst Jill Gonzalez wrote. “Home equity products provide the lowest interest rates and longest payoff timelines, but the borrower’s house serves as collateral. Ultimately, people should choose the option they are most comfortable with.”
WalletHub is a financial information website and compiled its own credit report data with data from Google Trends to compile the rankings.
Nearby New York finished first in the rankings, meaning its residents were most inclined to borrow, while Vermont landed at 50th. Other states in the Northeast, including Massachusetts (36th), Connecticut (38th) and Maine (44th) landed somewhere in the middle.
P.V. Viswanath, a professor of finance at Pace University’s Lubin School of Business in New York, warned that borrowing can lead to problems down the road, which suggests that New Hampshire residents’ relative reluctance to consider the option is well-founded.
“Especially if interest rates are high, implications for future cashflow might be severe,” Viswanath wrote. “Hence it is crucial to try and plot out scenarios as to what will happen going forward. If your job situation is relatively secure (or you feel that you will be able to get another job once the situation improves), then you can feel more comfortable about borrowing.”