1 young coloradian in 4 counts on the “Bank of mom and dad” to obtain loans
DENVER (KDVR) – A new survey shows that a good chunk of young Coloradians in their twenties are turning to ‘The Bank of Mom & Dad’ to help them pay their bills during the pandemic.
Traditionally, this type of personal loan application has been used for non-essential purchases, such as vacation money. But this time it is not.
It’s a trend that started long before the pandemic, experts say.
“I’m not at all surprised,” said Dr Christina Huber, professor of economics at MSU Denver. “But obviously I think this trend has just accelerated now that we are in the middle of a pandemic.”
Huber said applying for parent loans is especially popular among recent college graduates struggling with crippling student loans.
According to the survey, 78% of young people in their twenties said they borrowed from their parents because there was no interest charge.
“Often children can get interest-free loans from their parents and often without expecting them to be repaid. Parents can think of it as just helping their kids get back on their feet, ”said Dr Huber.
This is also reflected in the survey, where 1 in 5 parents admit that they are unsure of being reimbursed.
According to the data, the categories most young Coloradians ask their parents to borrow money for are: rent, car payments, groceries, and child care.
Suggest a correction