Imagine a financial landscape where $248 billion in personal loan debt is just the tip of the iceberg, as millions of Americans and people worldwide turn to this flexible funding option for everything from debt consolidation to dream weddings.
Key Takeaways
- In 2023, the U.S. personal loan market size reached $248 billion in outstanding balances, up 12.5% year-over-year
- Personal loan originations in the U.S. hit $220 billion in 2023, a 15% increase from $191 billion in 2022
- The global personal loan market was valued at $1.2 trillion in 2023 and is projected to grow at a CAGR of 8.7% through 2030
- In 2023, 45% of U.S. personal loan borrowers were aged 25-34, totaling 18 million individuals
- Women accounted for 52% of new U.S. personal loan applicants in Q1 2024
- Millennials (born 1981-1996) held 40% of U.S. personal loan debt at $100 billion in 2023
- 55% of debt consolidation personal loans used by 30-39 age group in 2023 U.S.
- 42% of U.S. personal loans in 2023 funded credit card debt payoff, averaging $11,000
- Home improvement projects accounted for 28% of personal loan uses in 2023 U.S.
- Average U.S. personal loan APR was 11.98% for super prime borrowers in Q1 2024
- Personal loan fees averaged 5.3% of loan amount for origination in 2023 U.S.
- Average personal loan term lengthened to 45 months in 2023 U.S. from 42 in 2022
- U.S. personal loan delinquency rate (60+ days) was 3.2% in Q1 2024, up from 2.9% prior year
- Serious delinquency (90+ days) for personal loans hit 1.1% in 2023 U.S.
- Personal loan charge-off rate averaged 4.5% for subprime borrowers in 2023 U.S.
Rising personal loan debt and delinquencies grow globally as borrowing surges.
Borrower Demographics
- In 2023, 45% of U.S. personal loan borrowers were aged 25-34, totaling 18 million individuals
- Women accounted for 52% of new U.S. personal loan applicants in Q1 2024
- Millennials (born 1981-1996) held 40% of U.S. personal loan debt at $100 billion in 2023
- 28% of U.S. adults with subprime credit scores (below 600) took personal loans in 2023
- African American borrowers comprised 15% of U.S. personal loan originations in 2023, despite 13% population share
- Urban residents obtained 65% of U.S. personal loans in 2023, averaging $13,500 per loan
- 35% of U.S. personal loan borrowers earned under $50,000 annually in 2023
- Gen Z (18-24) personal loan usage rose 50% to 5 million borrowers in 2023
- Hispanic/Latino borrowers represented 20% of new personal loans in U.S. 2023
- Single borrowers filed 60% of U.S. personal loan applications in 2023
- Baby Boomers held 15% of personal loan balances, averaging $8,000 per loan in 2023
- College-educated borrowers were 55% of U.S. personal loan users in 2023
- Self-employed individuals comprised 22% of personal loan approvals in 2023 U.S.
- Southern U.S. states saw 30% of national personal loan volume in 2023
- Borrowers aged 35-44 had the highest average personal loan size of $14,200 in 2023
- 42% of U.S. female-headed households used personal loans in 2023 survey
- Prime credit score borrowers (720+) took 48% of personal loans by volume in 2023
- Rural borrowers averaged $10,500 personal loans vs $12,800 urban in 2023 U.S.
- LGBTQ+ individuals reported 25% higher personal loan usage rate in 2023 U.S. survey
- Veterans comprised 8% of U.S. personal loan borrowers in 2023
- Borrowers with children under 18 were 55% of personal loan applicants 2023
- Asian American borrowers had 12% share of personal loans despite 6% population in 2023
- Gig economy workers (Uber etc.) took 18% of personal loans in U.S. 2023
- Homeowners vs renters: 40% vs 60% personal loan usage ratio in 2023 U.S.
- Borrowers over 65 increased personal loan reliance by 15% in 2023
- 38% of U.S. personal loan borrowers had bachelor's degree or higher in 2023
- Debt-to-income ratio over 40% for 25% of personal loan takers in 2023 U.S.
Borrower Demographics Interpretation
Amidst the soaring cost of modern life, this mosaic of statistics reveals a system where personal credit has become the unofficial first responder for a diverse and financially squeezed majority, from burdened millennials to resilient women and the upwardly mobile, with each demographic etching its own story of necessity and hope onto the nation's balance sheet.
Default Rates and Risks
- U.S. personal loan delinquency rate (60+ days) was 3.2% in Q1 2024, up from 2.9% prior year
- Serious delinquency (90+ days) for personal loans hit 1.1% in 2023 U.S.
- Personal loan charge-off rate averaged 4.5% for subprime borrowers in 2023 U.S.
- 25% of U.S. personal loans originated in 2022 showed early delinquency signs by 2023
- Default rate for personal loans under $5,000 was 6.2% in 2023 U.S.
- Personal loan net charge-offs reached $10 billion industry-wide in 2023 U.S.
- Subprime personal loan delinquency peaked at 7.8% in Q4 2023 U.S.
- Recovery rate on charged-off personal loans averaged 35% in 2023 U.S. lenders
- Personal loans had 2.1x higher delinquency vs mortgages in 2023 U.S. data
- 90-day delinquency for prime personal loans was 0.8% in Q1 2024 U.S.
- Bankruptcy filings linked to personal loan debt rose 12% in 2023 U.S.
- Average days past due for delinquent personal loans was 85 days in 2023
- Fintech personal loan default rate was 5.1% vs 3.8% banks in 2023 U.S.
- Personal loan loss provisions by banks totaled $15 billion in 2023 U.S.
- Early delinquency (30 days) rate for personal loans was 4.9% Q1 2024 U.S.
- High DTI borrowers (>40%) had 8% personal loan default rate 2023 U.S.
- Personal loan defaults concentrated in South at 6% rate in 2023 U.S.
- Charge-off rate for variable rate personal loans was 5.3% in 2023 U.S.
- Post-COVID personal loan delinquency normalized to 3.0% baseline in 2023
- Gen Z personal loan delinquency rate was 4.2% vs 2.5% overall in 2023 U.S.
Default Rates and Risks Interpretation
The American consumer's wallet is showing some alarming cracks, with personal loans leading the delinquency parade at more than double the mortgage rate, suggesting that while many are still borrowing with gusto, a growing number are finding that gusto doesn't pay the bills.
Interest Rates and Costs
- Average U.S. personal loan APR was 11.98% for super prime borrowers in Q1 2024
- Personal loan fees averaged 5.3% of loan amount for origination in 2023 U.S.
- Average personal loan term lengthened to 45 months in 2023 U.S. from 42 in 2022
- Subprime borrowers faced average 24.5% APR on personal loans in 2023 U.S.
- Fixed-rate personal loans dominated 95% of U.S. market in 2023
- Average monthly payment for $10,000 personal loan at 12% APR over 36 months is $332
- Late fees on personal loans averaged $29 per instance in 2023 U.S. lenders
- Prime borrowers (661-780 FICO) got average 10.5% APR in Q1 2024 U.S.
- Personal loan total cost over term averaged 1.25x principal for average borrower 2023
- No-fee personal loans grew to 20% market share in 2023 U.S.
- Average prepayment penalty was 2% of remaining balance in 2023 U.S.
- APR for $5,000 personal loan averaged 15.2% for fair credit in 2023 U.S.
- Personal loan interest deductibility limited to business use only in U.S. 2023 tax year
- Average closing costs for personal loans were $150 in 2023 U.S. online lenders
- Variable rate personal loans averaged 13.8% starting APR in 2023 U.S.
- Super prime (781+ FICO) secured 8.5% average APR on personal loans Q1 2024
- Total interest paid on average 48-month $12,000 loan at 11% APR is $3,456
- NSF fees for personal loan payments averaged $35 in 2023 U.S. banks
- Personal loan APR spread between best/worst credit widened to 20% in 2023
- Average personal loan rate for debt consolidation was 12.1% in 2023 U.S.
Interest Rates and Costs Interpretation
While the super prime borrowers enjoy the financial equivalent of a gentle breeze with single-digit APRs, the rest of us navigate a costly landscape where the average loan ultimately costs a quarter more than borrowed, proving that in the personal loan market, your credit score is less a number and more a price tag.
Market Size and Growth
- In 2023, the U.S. personal loan market size reached $248 billion in outstanding balances, up 12.5% year-over-year
- Personal loan originations in the U.S. hit $220 billion in 2023, a 15% increase from $191 billion in 2022
- The global personal loan market was valued at $1.2 trillion in 2023 and is projected to grow at a CAGR of 8.7% through 2030
- U.S. personal loan balances grew by 18% in Q1 2024 to $255 billion, driven by online lenders
- Fintech personal loan originations surged 25% YoY to $75 billion in 2023
- The personal loan sector in India expanded to INR 2.5 lakh crore in FY2023, with 30% YoY growth
- U.S. unsecured personal loan market share held by banks dropped to 35% in 2023 from 45% in 2020
- Personal loan disbursements in Europe reached €150 billion in 2023, up 10% from prior year
- Online personal loans accounted for 60% of U.S. originations totaling $132 billion in 2023
- U.S. personal loan market projected to reach $300 billion by 2025, CAGR 9.2%
- In Q2 2024, U.S. personal loan originations increased 5.2% QoQ to $58 billion
- China's personal loan market grew 14% to RMB 15 trillion in 2023
- Non-bank lenders originated 55% of U.S. personal loans worth $121 billion in 2023
- UK personal loan market volume hit £25 billion in 2023, up 7% YoY
- Average personal loan size in U.S. rose to $12,000 in 2023 from $11,200 in 2022
- Brazil's personal loan portfolio expanded 22% to BRL 500 billion in 2023
- U.S. personal loan growth rate outpaced credit cards at 16% vs 8% in 2023
- Australia personal loan market reached AUD 40 billion in outstanding debt in 2023
- Personal loan applications in U.S. spiked 20% in 2023 to 150 million
- Canada's personal loan balances grew 11% to CAD 60 billion in 2023
- U.S. Gen Z personal loan originations doubled to $10 billion in 2023
- Personal loan market in Mexico hit MXN 1.2 trillion in 2023, 18% growth
- Digital personal loans in U.S. grew 30% to $90 billion originations in 2023
- South Korea's personal loan debt reached KRW 200 trillion in 2023, up 9%
- U.S. personal loan share of consumer debt rose to 2.5% in 2023 from 2.1%
- Japan's personal loan market stabilized at JPY 50 trillion in 2023 after 5% decline
- Personal loan originations via apps in U.S. hit $40 billion in 2023, 40% YoY growth
- Turkey's personal loan portfolio grew 25% to TRY 1.5 trillion in 2023
- U.S. personal loan market CAGR forecasted at 10.5% from 2024-2028
Market Size and Growth Interpretation
Americans are evidently racing to borrow ever-larger sums at an astonishing clip, seemingly betting with great enthusiasm that their future selves will be far richer and more financially nimble than their current selves.
Usage and Purposes
- 55% of debt consolidation personal loans used by 30-39 age group in 2023 U.S.
- 42% of U.S. personal loans in 2023 funded credit card debt payoff, averaging $11,000
- Home improvement projects accounted for 28% of personal loan uses in 2023 U.S.
- Medical expenses drove 18% of personal loans totaling $25 billion in U.S. 2023
- 15% of personal loans went to auto purchases or repairs in 2023 U.S.
- Wedding financing comprised 12% of personal loan applications in 2023 U.S.
- Education expenses (non-student loan) used 10% of personal loans in 2023 U.S.
- Vacation/travel funded 8% of U.S. personal loans worth $12 billion in 2023
- Moving costs accounted for 7% of personal loan disbursements in 2023 U.S.
- Emergency funds/emergencies drove 22% of personal loans in 2023 U.S. survey
- Business startup loans via personal loans: 9% usage in 2023 U.S.
- Debt consolidation was purpose for 50% of loans over $15,000 in 2023 U.S.
- 32% of personal loans under $5,000 used for unexpected bills in 2023 U.S.
- Pet-related expenses (vet bills) funded 5% of personal loans in 2023 U.S.
- Furniture/appliance purchases: 14% of personal loan uses in 2023 U.S.
- 65% of personal loans for debt consolidation had APR under 15% in 2023 U.S.
- Legal fees funded 4% of U.S. personal loans averaging $9,500 in 2023
- Holiday shopping peak led to 11% of Dec 2023 personal loans U.S.
- 75% of medical personal loans were under $10,000 in 2023 U.S. data
- Green energy home upgrades: 6% of personal loans in 2023 U.S.
Usage and Purposes Interpretation
America's personal loan story is a ledger of modern life, where the thirty-somethings are scrambling to tame their past debts while simultaneously funding their present dreams and unexpected crises, from home renovations and vet bills to weddings and medical emergencies.
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