2020
9
US Lending Market Report 2020
2021-01-15T03:02:32+00:00
OX987162
3695
132209
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Report
en_GB
“The COVID-19 pandemic has brought health and economic instability to a substantial portion of the United States population. Unemployment is improving, but the economic ramifications of the pandemic will be…

US Lending Market Report 2020

£ 3,695 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the U.S Lending market, including the behaviors, preferences and habits of the consumer.

While lockdowns and the closure of many non-essential businesses caused economic uncertainty, many consumers saved money throughout 2020 and into 2021 due to a lack of spending opportunities. A number of US adults took advantage of this by paying off some of their outstanding debts, although a significant number remain stressed about the amount of debt they still owe.

Reduced consumer spending increased savings balances up by over $1 trillion, with government stimulus checks helping to support those in financial difficulty. As the pandemic subsides, however, interest rates remain the biggest differentiator for lenders. Companies will need to further innovate into digitization, especially as younger consumers age and find themselves in need of personal loans.

This report covers the current state of the US loans market, how it faired through the pandemic and the short and long term predictions as we emerge from the crisis. With market volatility affecting investor confidence, loan companies will need to utilise new opportunities created to help boost market recovery and improve consumer attitudes towards debt.

Read on to discover more details or take a look at all of our US Financial Services market research.

Quickly understand

  • The impact of the COVID-19 pandemic on consumer behavior and the lending market.
  • Effects of a US recession on lending.
  • Consumer attitudes toward debt.
  • Important factors in personal loan selection.

Covered in this report

Brands: Rise, Spotloan, Plain Green, One Main Financial, Discover, SoFi, US Bank, Affirm, AfterPay, Kalrna, QuadPay, Sezzle, Peloton, West Elm, Apple, MarcusPay, JetBlue.

Expert analysis from a specialist in the field

Written by Jennifer White Boehm, a leading analyst in the Financial sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The COVID-19 pandemic has brought health and economic instability to a substantial portion of the united states population. Unemployment is improving, but the economic ramifications of the pandemic will be felt long after the COVID-19 vaccine is widely available. Consumers who are able have been proactively paying down their debt, but the number of consumers who are struggling economically will continue an increased need for lending products at the current advantageous interest rates.

Jennifer White Boehm
Associate Director, Finance Reports

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
          • COVID-19: Market context
            • Economic and other assumptions
            • Executive Summary

                • Top takeaways
                  • Personal finances are not improving
                    • The COVID-19 crisis has made US adults state that they are even more averse to taking on debt…
                      • …but the interest in personal loans prevails
                        • Consideration of non-traditional lenders, credit assessment is increasing
                          • Market overview
                            • Impact of the COVID-19 pandemic on lending
                              • Figure 1: Short-, medium- and long-term impact of the COVID-19 pandemic on lending, November 2020
                            • Opportunities and Challenges
                              • Re-emergence
                                • Recovery
                                • The Market – Key Takeaways

                                  • US adults are paying down debt during COVID-19 pandemic
                                    • Delinquencies are starting to creep up
                                      • Unemployment continues to drop, but remains above pre-pandemic levels
                                      • Market Size

                                        • US adults are paying down debt during COVID-19 pandemic
                                          • Figure 2: Total US non-housing consumer debt, by type, Q3 2003–Q2 2020
                                        • Stimulus money caused personal savings rate to skyrocket, then rapidly decline
                                          • Figure 3: Personal saving rate, January 2008–November 2020
                                        • The COVID-19 crisis is slowing the growth of the number of auto and credit card accounts
                                          • Figure 4: Number of auto and credit card accounts, Q2 2003–Q2 2020
                                      • Market Factors

                                        • Delinquencies are starting to creep up
                                          • Figure 5: Percent of accounts 90+ days delinquent, by type of loan, Q2 2003-Q2 2020
                                        • Credit card balances are dropping faster than credit limits
                                          • Figure 6: Credit card balance, total limit, and available limit, Q2 2003 – Q2 2020
                                        • Unemployment continues to drop, but remains above pre-pandemic levels
                                          • Figure 7: Unemployment and underemployment, January 2007–November 2020
                                        • DPI down from the stimulus peak, but still higher than 2019
                                          • Figure 8: Disposable personal income, change from previous period, January 2007–October 2020
                                        • Consumer confidence rebounds, and continues upward climb
                                          • Figure 9: Consumer Sentiment Index, January 2007–October 2020
                                      • Companies and Brands

                                        • Subprime lenders took a bigger slice of the mailbox
                                          • Figure 10: Rise direct mail pieces, October 2020
                                          • Figure 11: SpotLoan mail July 2020
                                          • Figure 12: Plain Green mail September 2020
                                        • Consolidating credit card debt remained a popular message
                                          • Figure 13: OneMain direct mailer, October 2020
                                        • Lenders promoted specific types of loans for those staying near home
                                          • Figure 14: Discover digital ad, 2020
                                          • Figure 15: SoFi digital ad, 2020
                                        • Microloans and BNPL step up competition against personal loans
                                          • Microloans
                                            • Figure 16: US Bank Small Loan email, March 2020
                                          • BNPL (buy now, pay later)
                                            • Figure 17: BNPL digital ads, 2020
                                        • The Consumer – Key Takeaways

                                          • Most consumers have at least one type of debt
                                            • Banks are used most for loans
                                              • Parents will be applying for loans
                                                • The COVID-19 crisis is challenging consumer finances
                                                • Type of Debt

                                                  • Most consumers have at least one type of debt
                                                    • Figure 18: Types of debt, October 2020
                                                  • Debt is not spread evenly across generations
                                                    • Figure 19: Types of debt, by generation, October 2020
                                                  • Having children is a primary driver of debt
                                                    • Figure 20: Types of debt, by parental status, October 2020
                                                  • Credit card debt most prevalent
                                                    • Figure 21: Credit card debt, by generation, October 2020
                                                  • Men are more likely to have personal loans
                                                    • Figure 22: Type of debt, by gender, October 2020
                                                • Interest in Using Personal Loans

                                                  • Banks are used most for loans
                                                    • Figure 23: Interest in personal loans, October 2020
                                                  • Interest in personal loans is highest among young people
                                                    • Figure 24: Interest in personal loans, by generation, October 2020
                                                  • Hispanics are most interested in non-traditional options
                                                    • Figure 25: Interest in personal loans, by Hispanic origin, October 2020
                                                • Reasons for Taking Out a Personal Loan

                                                  • Refinancing other debt is most popular reason
                                                    • Figure 26: Reasons for taking out a personal loan, October 2020
                                                  • Parents’ needs are different
                                                    • Figure 27: Reasons for taking out a personal loan, by parental status, October 2020
                                                • Plans to Open A Personal Loan

                                                  • Many young Hispanics will be in the market for a loan
                                                    • Figure 28: Plans to apply for a personal loan, by Hispanic origin, October 2020
                                                  • Parents will be applying for loans
                                                    • Figure 29: Plans to apply for a personal loan, by parental status, October 2020
                                                • Important Factors in a Personal Loan

                                                  • Interest rate is the most important factor in deciding on personal loans
                                                    • Figure 30: Most important factors in choosing a personal loan, October 2020
                                                  • To young consumers, online applications are more important than existing relationships
                                                    • Figure 31: Most important factors in choosing a personal loan, by generation, October 2020
                                                  • Black adults have slightly different priorities
                                                    • Figure 32: Most important factors in choosing a personal loan, by race, October 2020
                                                • Lending Effect on Financial Situation

                                                  • Personal finances are not improving
                                                    • Figure 33: Lending effect on financial situation, November 2019 vs October 2020
                                                  • Men are struggling more than women
                                                    • Figure 34: Lending effect on financial situation, by gender, October 2020
                                                  • Parents are more susceptible to default
                                                    • Figure 35: Lending effect on financial situation, by parental status, October 2020
                                                • Attitudes and Behaviors toward Lending

                                                  • Half of all consumers are now averse to debt
                                                    • Figure 36: Attitudes and behaviors toward debt, by age, October 2020
                                                  • Men are having more trouble with loans
                                                    • Figure 37: Attitudes and behaviors toward debt, by gender, October 2020
                                                  • Young people are stressed about debt – but are comfortable with even more
                                                    • Figure 38: Attitudes and behaviors toward debt, by generation, October 2020
                                                  • Some Black adults are considering non-traditional lenders before their own banks
                                                    • Figure 39: Attitudes and behaviors toward debt, by race, October 2020
                                                  • Non-traditional lenders attract those with lower credit scores
                                                    • Figure 40: Attitudes and behaviors toward debt, by credit score, October 2020
                                                • Appendix – Data Sources and Abbreviations

                                                  • Data sources
                                                    • Consumer survey data
                                                      • Direct marketing creative
                                                        • Abbreviations and terms
                                                          • Abbreviations

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