Younger Consumers Use Personal Loans for Everyday Living Expenses

A growing number of Gen Z and millennial consumers are borrowing cash through personal loans to cover routine expenses like groceries, utilities and rent.

A new LendingTree report found that the number of consumers using personal loans to pay everyday bills has more than doubled over the last three years. The figure rose from 3.4% in 2023 to 8.2% in 2026, shifting routine bill payment from the 10th most common reason for loan requests to the fourth.

The trend is most pronounced among younger adults. According to the data, 10.5% of Generation Z borrowers aged 18 to 29 and 9.3% of millennials aged 30 to 45 requested personal loans to handle day-to-day living costs. By comparison, 6.6% of Generation X and 5.6% of baby boomers sought loans for the same reason.

“Younger borrowers are coming of age in a much tougher financial environment, where essentials like housing, transportation and insurance are taking up a bigger share of income than they did for prior generations,” said Matt Schulz, LendingTree’s chief consumer finance analyst.

Schulz noted that many younger consumers have not yet established savings cushions, leaving them reliant on credit when costs spike.

The data suggests that broader macroeconomic factors are squeezing household budgets. Wage growth has struggled to keep pace with persistent inflation, particularly for essential goods and services. U.S. wages rose 3.6% from April 2025 to April 2026, while the inflation rate sat at 3.8% over the same period, CNN recently reported.

Borrowers seeking funds for everyday expenses generally request lower loan amounts and carry weaker credit profiles. The average loan request for basic bills was $4,317, which represents one of the lowest amounts tracked by LendingTree. Additionally, the average credit score for these applicants was 574.

Borrowers with deep subprime credit scores below 580 made up 9.4% of the requests for everyday bill loans, whereas only 2.8% of super-prime consumers with scores above 800 applied for funds for routine costs.

The reliance on personal financing for basic needs also shows geographic and seasonal variations. Consumers in Louisiana generated the highest proportion of loan requests for everyday bills at 10%, followed closely by New Hampshire at 9.8% and Pennsylvania at 9.7%.

Nationally, requests peaked during the back-to-school season in September and the holiday season in December, when seasonal spending adds pressure to tightly stretched household budgets.

“If you’re borrowing to pay essential bills, it becomes extremely difficult to get ahead financially,” Schulz said. “It means there’s no extra money to put toward emergency funds, retirement savings or any other big financial goals.”