2026
9
UK Personal Loans Market Report 2026
2026-04-02T12:01:20+00:00
REP04EA0E23_6722_474A_AA0E_236722674A55
2195
192463
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Report
en_GB
Demand for personal loans is still closely tied to discretionary medium-to-large-ticket purchases, but a meaningful proportion of consumers also borrow to manage financial pressure. Indeed, making ends meet or debt consolidation…
UK
Mortgage and Loans
simple

UK Personal Loans Market Report 2026

"Renewed pressure on household budgets will weaken demand for loans used for discretionary big-ticket purchases, but strengthen the case for debt consolidation."

George Zaborowski, Senior Market Analyst

George Zaborowski, Senior Market Analyst

UK Personal Loans Market – Trends and Insights

  • Demand for personal loans is still closely tied to discretionary medium-to-large-ticket purchases, but a meaningful proportion of consumers also borrow to manage financial pressure. Indeed, making ends meet or debt consolidation are the main reasons for borrowing for a quarter of UK consumers considering a personal loan in 2026.
  • Renewed inflationary pressure is likely to increase demand for loans used to cover shortfalls in household finances, creating a near-term growth opportunity for providers. With large retail banks more focused on prime borrowers, smaller and more agile fintech and specialist lenders may be better placed to capture this demand via their advanced data-driven underwriting and credit management capabilities.
  • The challenge is that trust in personal loan providers remains weak, with relatively few consumers believing lenders act in their best interests and most preferring a well-known provider to a lesser-known brand. This leaves many, especially under-35s, more inclined to consider alternatives such as credit cards, overdrafts and BNPL. Stricter BNPL regulation coming into place could improve the competitive position of personal loans in lower-value borrowing, but providers will still need to communicate more clearly about when and why a personal loan offers better value than more easily accessible forms of credit.

This Report Looks at the Following Areas:

  • The size of the personal loan market and its projected growth over the next five years
  • The types of loans and credit products consumers currently owe money on
  • Consumer interest in taking out an unsecured personal loan in the next 12 months
  • The main reasons consumers take out unsecured personal loans
  • The key factors consumers consider when choosing a personal loan
  • Consumer trust in unsecured personal-loan providers, including the traditional/challenger brand dynamic
  • Interest in personal loan alternatives across age groups, including BNPL

Market Definitions

For the purposes of this report, Mintel has used the following definitions:

  • Personal loans are structured credit products, generally available to borrow for between £1,000 and £25,000 (subject to credit checks) over fixed repayment terms of one to 10 years.
  • High-cost short-term credit loans and payday loans are defined as unsecured loans of value under £1,000 with a repayment term of typically less than one year.
  • Guarantor loans are unsecured loans where a second person (the guarantor) is responsible for paying off the debt if the person who took out the loan is unable to meet the repayments. Guarantor loans are typically available from between £500 and £10,000. This Report considers guarantor loans to be high-cost credit.
  • P2P loans are personal loans lent through a P2P platform, which matches savers with borrowers to cut out the role of banks in lending money to consumers. P2P loans are typically available from £1,000 up to a value of £25,000.
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  1. EXECUTIVE SUMMARY

    • What you need to know
    • Outlook for personal loans
    • Opportunities
    • Win new business by making switching easier
    • Boost demand through gender-targeted marketing
    • Build trust through strategic partnerships
  2. THE MARKET

    • Snapshot – personal loans market size and forecast
    • Consumers and the economic outlook
    • FCA regulation of BNPL creates a more level playing field
    • Consumer Credit Act modernisation should accelerate innovation in personal loans
    • Personal loans market growth expected to be subdued over the next five years
    • Graph 1: market value forecast of outstanding balances for personal loans/unsecured lending, 2019-30
    • Renewed inflationary pressure clouds the near-term market outlook for personal loans
    • Consolidation in the personal loans market
    • Graph 2: estimated market share of the unsecured personal loans market, 2023-25
    • Consolidation in market share sees big names tighten their grip on the market
  3. THE CONSUMER

    • Ownership of personal loans
    • Unsecured loans remain stable
    • Established lenders the leading originators of personal loans
    • Graph 3: type of unsecured personal loan held, 2025
    • Two fifths of borrowers hold a personal loan with a specialist lender
    • Graph 4: type of personal loan held, 2020-25
    • Reasons for taking out personal loans
    • Consideration indicates potential growth
    • Parents offer a prime target for personal loans
    • Vehicle purchase and travel the top motivations for taking out a loan in 2026
    • Graph 5: reasons for considering taking out an unsecured personal loan in the next 12 months, 2025
    • Maximise demand via gender focused marketing
    • Graph 6: reasons for considering taking out an unsecured personal loan, by gender, 2025
    • AI-powered white label lending expands the reach of loan providers
    • Lenders can play a central role in guiding the most vulnerable become more financially resilient
    • Decision drivers for personal loans
    • Low rates remain the priority, but convenience, flexibility and lender familiarity also matter
    • Graph 7: most important features when choosing an unsecured personal loan, 2025
    • Differentiate beyond rates to stand out from the crowd
    • Fin-tech providers set the tone on convenience and flexibility
    • Confidence and trust
    • Borrowers are confident managing loans, but less sure about switching to a better one
    • Graph 8: Confidence with aspects of taking out a personal loan, 2025
    • Borrowers are confident managing loans, but less sure about switching to a better one
    • Graph 9: confidence with aspects of taking out a personal loan, 2025
    • Limited trust in the sector
    • Trust is especially tough for challengers
    • Alternatives to personal loans
    • Personal loans are far less popular than other forms of credit
    • Graph 10: products money owed on, 2025
    • Young people have a negative perception of personal loans
    • Young people prefer to avoid personal loans
    • BNPL strongly favoured over personal loans by younger borrowers
    • Graph 11: loan products consumers currently owe money on, by age, 2025
  4. INNOVATION AND MARKETING

    • Oakbrook and Experian launch ReFi tech powered debt consolidation loan for underserved borrowers
    • Post Office partners with Lendable to re-enter personal loans market
    • Clay Technologies and Pepper Advantage launch two new fully app-based personal loan products
  5. APPENDIX

    • Market definition
    • Abbreviations
    • The market
    • Forecast methodology
    • Forecast methodology – fan chart
    • Market size and forecast of the UK personal loans market
    • Market forecast and prediction intervals
    • The consumer
    • Consumer research questions
    • Consumer research methodology
    • UK Report generation groups definitions

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