Survey: Most South Dakotans Don’t Need Loans to Pay Basic Bills
South Dakota has received national attention for having the fewest COVID-19 restrictions and for being one of the first states to bounce back from the pandemic shutdowns. Our jobless numbers due to COVID layoffs remain among the lowest in the country and our economy is currently one of the best.
Around the country, it's a different story. Millions of people have lost their job due to a state government-mandated shutdown of their employer. Some of these people are left searching for options to get money for bills and to stay above water. Some of them are resorting to taking on debt through high interest, short term loans just to pay for basic necessities like rent and food.
J.A. Connell, CPA, CGMA, and Associate Professor of Business, Stephens College of Business, University of Montevallo, says there is a risk in taking out a short term loan to pay basic needs.
"A lot of people are risking their financial future and credit scores by taking out loans for short-term needs while the economy is still weak," says Connell. "I realize some needs must be met, like food, rent, mortgages, but I would advise anyone to consider entering the gig economy or downsizing before going into debt. I see some companies advertising “emergency loans” with interest rates up to 35% and that should scare anyone."
The personal finance website WalletHub reports that South Dakota came in next to last for people searching for short-term loans. Vermont was the only state that did better. According to WalletHub, a greater interest in getting a loan indicates that more people in the state are struggling to make ends meet.
The rankings for South Dakota:
49th – “Loan” Search Interest Index
50th – “Payday Loans” Search Interest Index
48th – “Home Equity Loan” Search Interest Index
44th – Change in Average Inquiry Count July 28, 2020 vs. January 1, 2020
Other rankings around the upper Midwest:
7th – Minnesota
35th – Wyoming
44th – Nebraska
46th – North Dakota
48th – Montana
New York is the number one state where people are looking for short-term loans.