Younger generation drives online loan boom

Easy money

In recent years, many e-commerce companies such as Alibaba and JD have started offering consumer credit services, making it much easier for people to satisfy their desire to consume.

For example, people windowshopping on Taobao or JD can not only see the basic price of the goods, but also the options for payment by installments and the extra cost of doing so.

"This method tempts me to make a decision when I am hesitating about buying something out of my reach. When you visit e-commerce websites, it's easy to see promotions for shopping on credit," said Wang Guobo, a Beijing resident.

Wang made his first credit-based purchase in 2015, when he bought a set of headphones from Taobao for 2,700 yuan.

At the time, he was a graduate student with a monthly income of about 2,000 yuan from part-time jobs.

Wang got the headphones by borrowing money from the Ant Check Later service offered by Ant Financial, and repaid 250 yuan a month for 12 months, bringing the total cost to 3,000 yuan.

"It was convenient and easy to get the money, despite my low credit rating. The interest was a little high, but I didn't need to ask my parents for money or borrow from friends," he said.

"After all, it was just a couple of thousand yuan. If I had turned to my parents, maybe they would have complained that the headphones were too expensive. The monthly installments were easily affordable, and I could enjoy the headphones earlier (than if he had saved for them)."

A little later, he borrowed more money to buy a smartphone, again paying in monthly installments over a year.

The 30-year-old, who now earns about 10,000 yuan a month in Beijing, still uses credit frequently.

"If you plan carefully and are sensible about the amount you borrow, the 'buy now, pay later' experience is a good one," he said.

Problems

Despite the relative ease of borrowing, there is a downside. People who spend more than their salary to satisfy their hunger for consumption may experience stress-related problems and even leave themselves open to long-term debt.

Zou Jianjie, 25, does not have a stable salary. He usually earns a few thousand yuan a month as a salesman in Jinan, Shandong province, but he never balks at prices in the restaurants he takes his girlfriend to or the gifts he buys for her.

As a result of this unplanned spending and his unstable income, he often struggles to make it through to payday at the end of the month.

He occasionally borrows money from an older cousin to relieve his straitened finances. Sometimes he asks for just a few hundred yuan, but last month the figure was 2,000 yuan.

Xu Na said she learned her lesson from the debt she incurred last year.

"The money comes quickly, after just a few clicks on your phone," she said. "After you borrow the first time, you try again and may even become addicted."

The second half of last year was touch-and-go for her because she had to repay 2,000 to 2,500 yuan a month from June to January.

The monthly installments crippled her financially, given that she earns about 5,000 yuan a month and her rent accounts for 1,500 yuan of that sum.

"I reduced my other expenses to the lowest possible level. I didn't take taxis, have my hair styled or drink coffee. I even filled my stomach by eating the free cakes and fruit at my company's afternoon tea parties so I could skip dinner," she said.

In January, when Xu finally paid off all her debts, she felt an overwhelming sense of relief.

"I really got to know about pinching and scraping from that experience," she said. "I didn't tell my parents or ask friends for help; after all, it was my choice to borrow the money, so I had to deal with the fallout on my own."