The Fearless Girl statue stands in front of the New York Stock Exchange, Thursday, July 9, 2020, in New York.
(The Center Square) – Despite being the home of Wall Street and serving as one of the nation’s economic engines, New Yorkers appear to be in need of assistance via loans more so than any other state.
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 York came in first overall in the rankings.
“Greater interest in getting a loan indicates that more people in the state are struggling to make ends meet,” WalletHub’s Adam McCann wrote. “It also implies there may be more strain on the state’s public assistance programs in the near future, and the state may experience a deeper recession than others will.”
The overall analysis was based on four broad categories, none of which bode well for the Empire State:
• Loan Search Interest Index Rank: Fourth
• Payday Loans Search Interest Index Rank: Second
• Home Equity Loan Search Interest Index Rank: Sixth
• Change in Average Inquiry Count Rank: 20th
“New York ranks first for overall interest in loans during the pandemic, which is surprising because the state has had the 18th highest recovery in unemployment since the pandemic started, despite being the hardest hit by the disease itself,” WalletHub analyst Jill Gonzalez said.
WalletHub is a financial information website and compiled its own credit report data with data from Google Trends to compile the rankings.
At the other end of the spectrum from New York was immediate neighbor Vermont, which landed at 50th. Other states in the Northeast, including Pennsylvania (13th), New Jersey (19th), Massachusetts (36th) and Connecticut (38th) landed somewhere in the middle.
WalletHub spoke to a number of financial experts to interpret the findings, including P.V. Viswanath, a professor of finance at Pace University’s Lubin School of Business in New York. He warned that while some forms of borrowing may be low-risk, such as from one’s own 403(b) or 401(k) plans – provided borrowing is allowed – other types of loans could create long-term problems.
“Obviously, with such borrowing, as for borrowing from any other source, it is important to have in mind how one will repay the loan,” Viswanath wrote. “Especially if interest rates are high, implications for future cashflow might be severe.”
He suggested that borrowing from family might be a reasonable option for some people, and some credit unions offer favorable interest rates. Credit cards, on the other hand, tend to have higher rates.