By Joelle Fredman, Communications Staff

Consumers with student loan debt are more likely to take out personal loans to finance their holiday shopping and spend more money on gifts than those without debt, according to a new survey by Student Loan Hero.

The survey found that while 18 percent of shoppers without student loan debt said they have taken out personal loans during the holiday season to afford buying gifts for friends and family, that figure almost doubled for those with student loan debt.

More than half of those consumers with student loan debt also said they planned to spend more than they did last year on holiday gifts. Only 37 percent of those without debt said their spending would increase. About one-third of those consumers with student debt predict they will spend more than $500 on credit cards this season, while just 22 percent of those without loans said they will exceed the same amount.  

The survey also found discrepancies in how shoppers plan to pay for holiday expenses. Almost 70 percent of those with student loan debt will rely on credit cards. That figure drops to 45 percent for those without loans.

“People who already have debt are more likely to continue using debt,” said Daniel Levine, director of the global trends consultancy Avant-Guide Institute. “If you already have student loans, you are likely to feel comfortable using credit cards to make your purchases, even if it means you spend a little more.”

In addition to incurring more debt, 40 percent of shoppers admitted that they considered skipping a student loan payment in order to spend more this season, elongating their repayment process.

Unlike spending habits, however, the timeline for paying off these personal loans appears to be the same across the board. About one-third of consumers, both with and without loan debt, said it would take them more than six months.

While incurring more debt over the holidays can be daunting, it will not stop consumers with student loan debt from spending on loved ones, according to the report.

“It looks as though very few consumers will skip holiday spending altogether in the name of saving money," the survey said.

Publication Date: 11/22/2017

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