A new report reveals that more than 60 percent of Chinese students borrow money from online financial services, and most of it is allocated for shopping.

The survey conducted by China University Media Union (CUMU) revealed that students who borrow less than 1,000 yuan ($150) account for nearly 41 percent, between 1,000 and 2,000 yuan over 40 percent, and more than 5,000 yuan more than 5 percent, China Youth Daily reported. 

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Of the borrowers, more than half repay a monthly amount between 100 and 300 yuan. Major sources of income include advance use of the next month's budget, part-time jobs and frugality.

Currently, there are more than 100 loan providers to choose from. The loan can be availed in different forms ranging from peer-to-peer online services and installment buying to financial institutions such as Alibaba and JD.com. Some of these establishments allegedly grants loan in a few seconds and some are offered at a low interest rate.

Of the students, almost 85 percent confessed to being hesitant to divulge their parents' contact numbers during loan application. 

Buying gadgets, clothes and travelling are the top reasons why students borrow money. Fujian Normal University freshman student Zhang Zemin said that he feels embarrassed to ask his parents to lend him some money, so he opted to apply for a loan to buy a computer.

However, some students use their loans for other purposes including business funding like Li Hailang of Ningxia University who borrowed money to start a Liangpi business, a Chinese cold skin noodle dish made from wheat or rice flour.

The report warns students to ensure that they fully understand the terms and agreement stipulated in the contract and to create a good repayment plan. On the other hand, Hunan University's marketing department dean Kang Jun also reminded lending institutions to see to it that the borrowers, especially students, are well informed.

Tagschina, China University Media Union, online financial services, Alibaba, JD.com