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Who usually uses them
 These
loans may be the easiest to get for people whose income and savings
are at lower levels. In many cases they may be the only sort of
loan -- whether it's for emergency or fun money -- that they have
a shot at from mainstream sources.
But such users aren't the only one who
take out this type of loan.
Folks in the upper-income brackets are
heavy users of unsecured loan privileges, too, often in the form
of large lines of credit attached to checking accounts. Why? People
with large deposits and investments know they might forget to move
money around before they make a large purchase or take a trip, for
example. A personal or loan line of credit can be used to fill in
the holes that would otherwise appear in their account balance.
"It's a money management feature
for those in the higher end of the income distribution," says
Bill Hempel, chief economist for the Credit Union National Association
in Washington, D.C.
Kevin Holzendorf, manager of a NationsBank
branch in Jacksonville, Fla., says a lot of his short-term unsecured
borrowers come from different ends of the financial spectrum.
"You frequently see renters who
have no home equity to borrow against coming in to finance a large
item," he says. "But it's also common to see higher-end
customers walk in and want a short-term loan."
-- Updated: March
19, 2004
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