More middle-aged Singaporeans aged 40 to 59 seek loans to manage cost-of-living pressures

SINGAPORE: More middle-aged Singaporeans seek loans to manage cost-of-living pressures amid escalating household expenses, medical costs, and credit card debt. 

Over the past two years, the share of loan applications from individuals aged 40 to 59 had jumped by 28 per cent, with an average loan amount of S$22,000, according to loan matching platform Lendela.

Lendela’s data, released on Aug 8, showed that the middle-aged group now represented approximately one-third of all loan applications.

This shift contrasted with a decrease in loan applications from younger borrowers aged 18 to 29, whose share had dropped by 25 per cent since 2022, as reported by TODAY.

Although Lendela did not disclose exact figures due to commercial sensitivities, the data was based on nearly 200,000 applications submitted by Singaporeans and permanent residents between 2022 and 2024.

A Lendela spokesperson said that the data focused on loan applications rather than the actual disbursement of loans, noting a “slight difference” between the two figures.

Bryan Tay, Singapore country manager for Lendela, noted that the “gradual but consistent” increase in loan applications among middle-aged individuals and borrowers earning above the median wage (S$62,000) correlated with rising living costs.

The report highlighted a 35 per cent rise in applications from middle-income earners (those with annual incomes between S$48,000 and S$84,000) and a 64 per cent increase from high-income earners (those making above S$84,000 annually).

Tay explained that the most common borrowing reasons related to “living costs and debt — such as recurring bills, debt consolidation, and existing credit facilities.”

The Lendela spokesperson explained that the firm could determine these reasons because borrowers must specify the purpose of their loans when applying at banks or licensed lenders.

The report found four of the six most common reasons for borrowing related to living costs. These included debt consolidation (30.8 per cent), paying bills (13.7 per cent), home and household expenditure (8.2 per cent), and credit card debt (8 per cent).

Borrowing for renovations and business-related costs constituted a smaller portion of the total applications, with 6.3 per cent and 5.1 per cent, respectively.

The report also revealed that a significant number of cost-of-living loan applications were for amounts exceeding S$20,000.

In addition, the share of borrowers with existing debts increased by 25 per cent from June 2022 to June 2024, while those with large debts exceeding S$50,000 grew by 56 per cent over the same period.

According to Mr Tay, this suggests a “growing need for help with managing large expenses and debts among Singaporeans amid a cost crunch.”

The Lendela report also noted a 50 per cent increase in loan applications from retirees over 60 since 2022, though this group represented only 3 per cent of total applications.

Meanwhile, loan applications from individuals in their 30s had slightly decreased, from just under 40 per cent to 37.6 per cent. /TISG

Read also: Rising cost of living: Can personal loans help?

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