The Latest Personal Loans Industry Statistics Explained
Over 21 million Americans have personal loans.
The statistic ‘Over 21 million Americans have personal loans’ indicates that a substantial portion of the American population has taken out personal loans for various reasons. Personal loans are a form of consumer credit that individuals can use for purposes such as debt consolidation, home improvements, medical expenses, or other financial needs. The fact that over 21 million Americans have personal loans highlights the prevalence and importance of this financial tool in managing personal finances and meeting individual needs. This statistic suggests that personal loans play a significant role in the financial landscape of many Americans, providing them with access to funds to achieve their goals and address financial challenges.
The global personal loan market size was valued at USD 1.07 trillion in 2019.
The statistic that the global personal loan market size was valued at USD 1.07 trillion in 2019 indicates the total value of personal loans extended to individuals worldwide during that particular year. This figure encompasses the aggregate amount borrowed by individuals for various purposes such as education, home renovation, debt consolidation, and other personal expenses. The magnitude of the market size reflects the significant demand for personal loans as a financial instrument for individuals seeking access to funds beyond their current means. It also underscores the substantial role personal loans play in the overall financial landscape, serving as a vital source of liquidity and financial support for individuals across different countries and economic backgrounds.
The number of personal loans rose 11% year over year in 2019.
The statistic that the number of personal loans rose 11% year over year in 2019 indicates that there was an 11% increase in the total number of personal loans issued in 2019 compared to the previous year. This growth suggests a rising trend in the demand for personal loans during that period, which could be influenced by factors such as favorable interest rates, economic conditions, or changes in consumer behavior. This information is valuable for financial institutions and policymakers to understand market dynamics and potential shifts in consumer borrowing patterns.
Fintechs reportedly provided approximately 38% of personal loans in 2018.
The statistic “Fintechs reportedly provided approximately 38% of personal loans in 2018” indicates that financial technology companies, known as fintechs, played a significant role in the personal lending market in 2018. This suggests that a notable portion of personal loans, nearly 4 out of every 10 loans, were originated by fintech companies rather than traditional financial institutions such as banks or credit unions. The growth of fintech lending highlights the increasing adoption of technology and online platforms in the financial services industry, offering borrowers alternative sources for accessing credit outside of the traditional banking sector. This statistic showcases the disruptive impact of fintechs on the lending landscape, signaling a shift towards more tech-driven and streamlined borrowing experiences for consumers.
Digital lenders are more heavily favored by people under the age of 30 for their personal loan needs.
This statistic suggests that individuals under the age of 30 are more inclined to utilize digital lenders to meet their personal loan requirements compared to other age groups. The data indicates a higher preference among this demographic for the convenience, accessibility, and possibly better terms offered by online lending platforms. The younger generation’s comfort with digital technology and their desire for quick and streamlined financial transactions likely contributes to this trend. This insight could be valuable for financial institutions and online lenders seeking to target and tailor their offerings to this specific age group.
Over 30% of applicants are likely to look online for their next personal loan.
The statistic ‘Over 30% of applicants are likely to look online for their next personal loan’ suggests that a significant portion of loan applicants prefer to search for personal loans through online channels. This finding highlights the growing trend of consumers turning to the internet as a primary source for financial products and services. With the convenience, accessibility, and abundance of online lending platforms, it is becoming increasingly common for individuals to explore loan options online rather than through traditional brick-and-mortar institutions. This statistic underscores the importance for financial institutions to have a strong online presence and provide competitive offers to attract and retain customers seeking personal loans.
The compound annual growth rate (CAGR) of the global personal loan market is projected to be approximately 13.6% from 2020 to 2027.
The compound annual growth rate (CAGR) of 13.6% projected for the global personal loan market from 2020 to 2027 indicates the average annual growth rate of the market over this period. This means that if the market continues to grow at this pace every year, the total market size for personal loans is expected to increase significantly over the 7-year period. A CAGR provides a smoothed annual growth rate, accounting for fluctuations in growth rates throughout the period, and is useful for comparing the growth of the market over time. The projected 13.6% CAGR suggests a robust and healthy expansion of the global personal loan market, signaling a positive trend for the industry in the coming years.
Consumers used personal loans for debt consolidation (61%) and credit card refinance (21%) most in 2018.
The statistic indicates that in 2018, the majority of consumers used personal loans primarily for debt consolidation (61%) and credit card refinance (21%). This implies that a significant portion of consumers were seeking to manage their finances more effectively by consolidating their existing debts or refinancing high-interest credit card balances using personal loans. Debt consolidation allows individuals to merge multiple debts into a single loan with potentially lower interest rates, making it easier to manage and pay off their financial obligations. Similarly, credit card refinance can help consumers save money on interest payments by transferring high-rate credit card balances to a lower-rate personal loan. These findings suggest that many consumers were actively seeking ways to improve their financial situations and reduce their debt burdens in 2018.
As of 2019, personal loan debt reached $305 billion.
The statistic “As of 2019, personal loan debt reached $305 billion” indicates the total amount of outstanding personal loan debt in the United States by the end of the year 2019. This includes all forms of personal loans such as credit card debt, student loans, medical loans, and other unsecured loans. The figure of $305 billion suggests a significant financial burden on individuals and households, highlighting a growing trend of borrowing to meet various financial needs. Analyzing this statistic can provide insights into the economic well-being of individuals, overall debt levels, and consumer behavior related to borrowing and spending.
Credit card refinancing and debt consolidation represent 85% of the usage of funds from online personal loans.
The statistic indicates that the majority of funds obtained from online personal loans are being utilized for credit card refinancing and debt consolidation purposes, accounting for 85% of the total usage. This suggests that a significant portion of individuals seeking online personal loans are doing so in order to manage their existing debts more effectively. Credit card refinancing involves transferring balances from high-interest credit cards to lower-interest loans, while debt consolidation involves combining multiple debts into a single loan with more favorable terms. This trend highlights the importance of addressing and restructuring debt obligations for many borrowers who are leveraging online personal loans as a financial tool to improve their financial situation.
The average annual percentage rate (APR) on a 24-month personal loan was 9.63% in Q1 2020.
This statistic indicates that the average annual percentage rate (APR) on a 24-month personal loan in the first quarter of 2020 was 9.63%. The APR represents the cost of borrowing over a year, taking into account interest and any additional fees. A lower APR signifies lower overall costs for the borrower, while a higher APR indicates higher costs. In this context, a 9.63% APR suggests that borrowers seeking a personal loan with a 24-month term during this period could expect to pay approximately 9.63% of the loan amount as interest and fees annually. It serves as a useful benchmark for consumers comparing loan offers and understanding the prevailing lending rates in the market at that time.
Nearly 60% of personal loan recipients cite debt consolidation as their reason for their loan.
The statistic stating that nearly 60% of personal loan recipients cite debt consolidation as their reason for the loan indicates a prevalent financial trend among individuals seeking personal loans. This data suggests that a majority of borrowers are using the loan proceeds to combine and pay off existing debts, likely with the goal of simplifying their financial obligations and potentially securing more favorable repayment terms. Debt consolidation can be a strategic approach to managing debt for individuals facing multiple high-interest loans or credit card balances. The popularity of this reason for taking out personal loans highlights the importance individuals place on organizing and reducing their debt burden, which can ultimately lead to improved financial stability and peace of mind.
In 2020, about 1 in 5 American adults expected to take out a personal loan.
The statistic “In 2020, about 1 in 5 American adults expected to take out a personal loan” suggests that approximately 20% of the adult population in the United States planned on borrowing money through a personal loan during that year. This statistic provides insight into the financial behaviors and attitudes of American adults, indicating a notable reliance on borrowing through personal loans for various purposes such as debt consolidation, home improvements, or unexpected expenses. Understanding this statistic can be valuable for financial institutions, policymakers, and individuals looking to make informed decisions about their borrowing and financial planning strategies.
The personal loan market in Asia Pacific is expected to witness the highest CAGR of 15.7% during 2020-2027.
The statistic indicates that the personal loan market in the Asia Pacific region is projected to experience a Compound Annual Growth Rate (CAGR) of 15.7% from 2020 to 2027. This suggests a strong and steady growth trend in the market for personal loans across countries in the Asia Pacific region during the specified time frame. Factors driving this growth may include increasing consumer demand for credit, expanding financial inclusion initiatives, favorable economic conditions, and technological advancements in the financial sector. The high CAGR of 15.7% implies significant market potential and opportunities for financial institutions, lenders, and other stakeholders operating in the personal loan market in Asia Pacific.
In the second half of 2019, digital banks in the UK issued £270m worth of gross new personal loans.
The statistic “In the second half of 2019, digital banks in the UK issued £270m worth of gross new personal loans” indicates the total value of personal loans that were newly granted by digital banks in the UK during the latter half of 2019. This figure represents the aggregate amount of money that was lent out to individuals for personal use by digital banking institutions. By specifically referring to digital banks, the statistic highlights the increasing role of technology and online platforms in the financial sector, as these banks are able to provide convenient and efficient loan services to customers through digital channels. The £270m value underscores the significant volume of personal loans issued by digital banks in the UK during that period, suggesting a growing trend towards digitalization in the banking industry and the increasing accessibility of financial products to consumers.
The average interest rate for personal loans is 11.88%.
The statistic ‘The average interest rate for personal loans is 11.88%’ indicates that across a sample of personal loans, the average annual interest rate charged to borrowers is 11.88%. This means that if you were to take a random sample of personal loans, on average, borrowers would be paying an interest rate of 11.88% per year. This statistic provides valuable information for individuals seeking personal loans as it gives an indication of the typical interest rate they might expect to encounter when borrowing money through a personal loan.
Around 24.3% of Gen X’s loan balances are in personal loans.
The statistic “Around 24.3% of Gen X’s loan balances are in personal loans” indicates that approximately a quarter of Generation X individuals’ total outstanding loan amounts are attributed to personal loans. This suggests that a significant portion of Gen X’s debt is not tied to specific assets, such as mortgages or car loans, but rather consists of unsecured personal loans. Personal loans often come with higher interest rates compared to other types of debt, which could potentially impact Gen X’s financial well-being and borrowing capacity. Understanding the prevalence of personal loans within Gen X’s overall debt profile can provide valuable insights into their financial habits and potential risks associated with their borrowing practices.
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