The COVID-19 crisis is taking its toll on the personal loan industry. According to data from LendingTree, the publicly traded online lending marketplace, personal loan inquiries on its marketplace hit calendar-year lows at the end of March, with loans for vacation and wedding expenses plummeting sharply.  

“As no one knows when travel will be open again, and weddings are being canceled or downsized to immediate family, people aren’t pursuing funding for this goal,” said Kali McFadden, senior research analyst at LendingTree. “It’s also likely that Americans feel insecure about their financial futures and are a lot less interested in adding another monthly payment for something they do not need.”  

Data from the Department of Labor indicates more than 6.6 million Americans filed for unemployment benefits last week, a trend that could make luxury spending tighten until the economy stabilizes.  

Compared to Jan. 5, LendingTree’s data indicates personal loan inquiries for weddings and vacations decreased 81% by the end of March. According to McFadden, this data stands in sharp contrast to spring months from previous years, a time when consumers take out personal loans for such expenses.  

The leading reasons LendingTree customers say they apply for a personal loans are credit card refinancing and debt consolidation. The company said this indicates consumers are trying to manage their financial lives as the crisis worsens.  

Consumers with a credit score of at least 720 are inquiring about personal loans at their typical numbers. The company noted, however, “the number of inquiries that matched lender criteria and the number that received offers were at the lowest levels of the year, suggesting that lenders aren’t willing or able to keep up with these usually very desirable borrowers.” 

The data also indicated that the best APRs on LendingTree’s marketplace increased during the last two weeks of March. LendingTree also saw a spike in the number of loans requested for business purposes during the week ending March 15. As Congress began pushing the Coronavirus Aid, Relieve and Economic Security Act, however, those numbers dipped 23% in one week.  

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Charlotte-based LendingTree analyzed anonymous data from its lending marketplace for the study, using the forms consumers fill out when requesting a personal loan. The 24-year-old company has more than 500 partners on its lending marketplace, which functions almost like Expedia — but for financial products, including auto, small business and personal loans, and mortgages and credit cards. According to the company, it has served more than 100 million consumers. 

Michael Funderburk, director of personal loans at LendingTree, said in a statement that lenders are having a difficult time figuring out whom to lend to and at what rates, given recent employment instability. “As they work on retooling their underwriting and pricing models, many lenders have significantly reduced their appetite to originate new loans, and the net result is consumers being left with fewer options,” he said.