The Latest Personal Loan Industry Statistics Explained
The total volume of personal loans increased by 11% year-on-year to $156 billion by the end of 2019.
The statistic indicates that the total volume of personal loans grew by 11% in comparison to the previous year, reaching a total value of $156 billion by the end of 2019. This suggests an increase in the overall amount of personal loans taken out by individuals over the course of the year. This growth could be attributed to various factors such as increased consumer confidence, favorable economic conditions, and easier access to credit. The higher volume of personal loans may indicate increased consumer spending, investment in assets, or possibly individuals seeking financial assistance for various needs. Overall, the statistic highlights a significant uptick in borrowing behavior among individuals in the given time frame.
In 2020, the average interest rate on a 24-month personal loan was 9.34%.
The statistic that in 2020 the average interest rate on a 24-month personal loan was 9.34% indicates the typical cost of borrowing money over a 24-month period. This average interest rate serves as a benchmark for consumers seeking personal loans, providing insight into the prevailing market conditions for borrowing money. A lower interest rate suggests that borrowing is relatively inexpensive, while a higher interest rate implies borrowing comes at a higher cost. Lenders typically use average interest rates to price their personal loan products, with individual borrowers’ rates varying based on creditworthiness and other risk factors. Overall, this statistic offers valuable information for individuals considering taking out a personal loan and for financial institutions looking to set competitive rates in the market.
In 2019, approximately 20.2 million Americans had a personal loan.
The statistic “In 2019, approximately 20.2 million Americans had a personal loan” indicates the number of individuals in the United States who took out personal loans during that year. This data point suggests a significant portion of the population sought financial assistance through personal loans for various reasons such as debt consolidation, home improvements, education expenses, or unexpected emergencies. The sheer volume of individuals with personal loans highlights the commonality and importance of this form of borrowing in managing personal finances. Analyzing this statistic can provide insights into consumer behavior, economic trends, and the overall financial well-being of individuals in the country.
Only around 8% of personal loan applications were approved in 2020.
The statistic “Only around 8% of personal loan applications were approved in 2020” indicates the low approval rate for personal loans during that year. This suggests that a vast majority of individuals who applied for personal loans were denied. A low approval rate could be attributed to various factors such as stringent lending criteria, economic conditions, credit history of applicants, and overall risk assessment by financial institutions. This statistic highlights the competitive nature of the lending industry and the challenges individuals may face in securing personal loans, underscoring the importance of maintaining good credit standing and meeting eligibility requirements to enhance the chances of loan approval.
An average debt consolidation loan amount is $12,670 for Gen X consumers.
The statistic that an average debt consolidation loan amount is $12,670 for Gen X consumers indicates that, on average, individuals belonging to the Generation X cohort who are taking out debt consolidation loans are accessing a financial product with a mean value of $12,670 to consolidate their existing debts. This suggests that Gen X consumers are utilizing debt consolidation as a strategy to manage and potentially reduce their debt burden. Understanding this average loan amount can provide insights into the financial behaviors and challenges faced by this demographic group, as well as the effectiveness of debt consolidation as a tool for debt management among Gen X individuals.
The average balance for personal loans was $16,458 in 2019.
The statistic “The average balance for personal loans was $16,458 in 2019” represents the mean balance amount of personal loans held by individuals in the year 2019. This value reflects the central tendency of the distribution of personal loan balances for a particular time period, with the average amount being calculated by summing up all individual loan balances and dividing by the total number of loans. In this case, $16,458 serves as a reference point to understand the typical amount borrowed by individuals for personal financial needs during that year, providing insights into consumer borrowing behavior and financial patterns.
Almost 1 in 10 Generation Z consumers has a personal loan.
The statistic ‘Almost 1 in 10 Generation Z consumers has a personal loan’ suggests that approximately 10% of individuals belonging to Generation Z, typically those born between the mid-1990s and early 2010s, have taken out a personal loan. This may indicate a trend among younger consumers towards leveraging credit options to meet their financial needs or goals. Understanding the prevalence of personal loans among Generation Z can provide valuable insights for financial institutions and lenders in tailoring their products and services to cater to the needs and preferences of this demographic group.
Baby Boomers hold 32.8% of total personal loan balances in the United States.
The statistic that Baby Boomers hold 32.8% of total personal loan balances in the United States indicates that individuals born between 1946 and 1964, known as the Baby Boomer generation, are responsible for nearly one-third of the outstanding personal loan debt in the country. This suggests that Baby Boomers, despite being an older demographic, continue to have a significant impact on the borrowing landscape, potentially due to a variety of factors such as higher healthcare costs, helping adult children financially, or maintaining a certain lifestyle in retirement. Understanding the loan behaviors of this generation is crucial for financial institutions and policymakers to tailor products and services to meet the needs of this demographic group.
The estimated default rate for personal loans was 6.7% in 2020.
The estimated default rate for personal loans of 6.7% in 2020 refers to the percentage of individuals who have borrowed money through personal loans and have failed to make the required payments on time, resulting in a default. This statistic is important for lenders and financial institutions as it helps assess the risk associated with lending money to individuals for personal use. A higher default rate indicates higher risk and potential financial losses for the lender, while a lower rate suggests a lower level of risk. Monitoring default rates is crucial for financial institutions to make informed decisions about loan approvals, interest rates, and overall portfolio management strategies.
Millennials hold 34% of all personal loan debt.
This statistic indicates that millennials, typically defined as individuals born between 1981 and 1996, collectively hold a significant portion of the outstanding personal loan debt. Specifically, millennials are responsible for 34% of all personal loan debt, suggesting that they are actively borrowing money through personal loans more so than other generations. Factors such as higher costs of living, student loan debt, and a desire for consumer goods and experiences may contribute to millennials’ increased reliance on personal loans. Understanding this statistic is crucial for financial institutions, policymakers, and individuals alike as they seek to address the unique financial challenges and needs of the millennial generation.
Around 34% of all personal loan dollars originate from online lenders.
This statistic indicates that approximately one-third of the total amount of personal loans issued comes from online lenders. This suggests a significant portion of the personal loan market is being dominated by online lending platforms. The use of online lenders for personal loans has become increasingly popular due to their convenience, quick approval processes, and competitive interest rates. This statistic highlights the growing trend of consumers turning to online platforms for their borrowing needs, indicating a shift in the traditional lending landscape towards more digital and tech-savvy approaches.
The average FICO score for borrowers taking out a personal loan is 682.
The statistic stating that the average FICO score for borrowers taking out a personal loan is 682 means that when you consider the FICO scores of all individuals who have borrowed a personal loan, on average, their FICO scores fall at 682. FICO scores, developed by the Fair Isaac Corporation, are commonly used by lenders to assess a borrower’s creditworthiness and likelihood of repaying debts. Therefore, a FICO score of 682 indicates that, on average, borrowers taking out personal loans have a moderate credit score that may be considered fair or good by lenders, suggesting they are likely to be approved for loans but may face slightly higher interest rates compared to those with higher credit scores.
The average size of a personal loan is between $5,000 and $20,000.
This statistic indicates that the typical size of a personal loan falls within the range of $5,000 to $20,000. It implies that most individuals who take out personal loans borrow amounts that are within this specified range. This information can be useful for financial institutions, borrowers, and policymakers in understanding the average loan amounts being borrowed by individuals for personal reasons. It can also provide insights into consumer behavior, financial needs, and economic trends related to personal borrowing habits.
The delinquency rate for personal loans is higher for subprime borrowers, reaching nearly 14%.
The statistic indicates that subprime borrowers, individuals with lower credit scores and higher credit risks, have a delinquency rate of nearly 14% on their personal loans. This means that a significant proportion of subprime borrowers are behind on their loan payments, reflecting a higher likelihood of default compared to prime borrowers with better credit profiles. The higher delinquency rate among subprime borrowers could be attributed to factors such as limited access to credit, financial instability, and higher interest rates charged to offset the increased risk. Lenders and policymakers may use this statistic to assess the impact of subprime lending on overall loan performance and to inform risk management and lending practices in the financial industry.
Conclusion
Based on the Personal Loan Industry Statistics discussed in this blog post, it is evident that the personal loan market is experiencing steady growth and becoming increasingly popular among consumers. The data highlights key trends, such as the rising demand for online personal loans and the impact of credit scores on loan approvals. As the industry continues to evolve, it is important for lenders and borrowers alike to stay informed and make well-informed decisions when it comes to personal loans.
References
0. – https://www.www.foxbusiness.com
1. – https://www.www.nerdwallet.com
2. – https://www.www.experian.com
3. – https://www.www.huffpost.com
4. – https://www.www.bankrate.com
5. – https://www.www.federalreserve.gov
6. – https://www.www.forbes.com
7. – https://www.www.lendacademy.com
