What types of debt a person has can matter a great deal. For one, it can have major implications when a person has trouble keeping up with their debt. This is because different types of debt can raise different kinds of issues when it comes to pursuing debt relief options. For example, the exact nature of a given type of debt can have impacts on how it would be treated in bankruptcy and on what implications this would have for a person who is pursuing bankruptcy. Bankruptcy lawyers can advise individuals considering bankruptcy on what the types of debt they have mean for what kind relief they might be able to receive through the bankruptcy process.
What trends when it comes to types of debt have millennials been experiencing? A recent TransUnion study indicates that there are a couple types of loans that millennials are more likely to take out than the generation before them was.
The study compared the credit habits of millennials in 2015 to the credit habits individuals in generation X had back when they were of the same age. While the study found that millennials generally had lower credit usage than gen Xers did, it found that millennials had a higher likelihood of taking out personal loans and auto loans.
Why are millennials more likely to open new auto loans and personal loans than the generation before them was when they were of the same age? The study pointed to increases in the sources and options available to consumers that have occurred in recent years when it comes to these loans playing a prominent role in this.
What impacts do you think the higher levels of taking out personal and auto loans among millennials will have on the long-term financial and debt situation of individuals in that generation?
Source: Business Insider, “Millennials have very different spending habits than their parents,” Akin Oyedele, Aug. 31, 2017