Skip to main content

Sign in

Enter your email and password below to access your account.

Not yet registered?

A new study has revealed that Generation Z (post-millennial youth born after 1996) are the most likely to apply for short-term loans, with under 22s also applying for more loans to cover bills and debts than their millennial counterparts.

The data released by personal finance experts,, shows that Gen Z are the most likely to seek the instant gratification of a short-term loan and to take out credit to cover bills and debts, while older generations are more likely to save to pay off existing commitments. Gen Z applied for almost double the amount of loans than their millennial counterparts over the last 12 months, and the research shows that 20 per cent of the applications for short-term loans came from the post-millennial generation in an attempt to make ends meet.

A debt relief charity recently reported that it’s detected a ‘worrying trend’ with a growing number of children contacting them for help after asking 18-year-old friends to take out short-term loans on their behalf and then being unable to repay them.

So, are the kids alright?

Deborah Vickers, channel director at said,

“Taking out short-term loans to cover other debts is a risky game, and could leave young people with more financial problems further down the line if they don’t read repayment and interest terms in detail.

Gen Z grew up even more immersed in a digital landscape than generations before them, and with electronic payments, automation and easy access to immediate credit accepted as the norm, it’s understandable why this generation is more  likely to turn to short-term loan options.

However, we need to remember that just because they’re taking out more short-term loans, that doesn’t mean they’re using them irresponsibly. This generation drinks less, take fewer drugs, and have made teenage pregnancy a near anomaly. They’re more cautious and risk-averse than their parents and more socially responsible.

Taking out a short-term loan and then paying it back can be a responsible way to build up your credit history, as long as it’s not on a regular basis. It will also help improve your credit record if you don’t miss any payments, as this is proof to your lenders you can manage your debt responsibly. There’s cheaper alternatives to short-term loans too, so it’s important each individual assess all options available. 

Short-term loans can also damage your credit report if you miss payments. As a general rule, you should only borrow what you need and can afford to pay back in the agreed time period.  

Consolidating your debts into one manageable monthly sum is also a proactive way of managing your money and again, not necessarily a bad thing.”

Short-term loans can be handy for getting you out of sticky situations. When you need to borrow a smaller amount of money to tide you over or need to fix a problem fast, there’s a few ways to get a short-term personal loan under your belt.

When you’re confident a short-term loan is right for you, make sure you have an exit strategy in place, so you don’t need to rely on borrowing in the future. Pay off your loan on time and start topping up that rainy-day fund in case of future problems.