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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."
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