US Personal Lending Market Report 2024
Personal lenders must adapt to meet the changing preferences of borrowers while navigating an increasingly competitive landscape.
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Executive Summary
- What you need to know
- Consumer trends: key takeaways
- Credit unions have an opportunity to convert interest into acquisition among Hispanic consumers
- Graph 1: types of personal lenders Hispanic consumers use, 2024
- Hispanic adults are most interested in taking out a personal loan from credit unions and online-only banks
- Financially healthy consumers are more aspirational in their personal loan usage
- Graph 2: reasons for opening a personal loan, by financial situation, 2024
- Millennials are driven by convenience-based factors when choosing a lender
- Graph 3: top factors when choosing a personal loan – NET – any rank , by generation, 2024
- Market predictions
- Opportunities
- Financial relief offerings can lend a helping hand to struggling customers grappling with the high-rate environment
- Refer-a-friend offers can be a successful acquisition tool given younger consumers' social preferences
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Market Dynamics
- Market context
- Market drivers
- Rate cuts could stimulate personal loan demand
- Personal lenders could be braced for a busy summer
- Market landscape
- Total household debt rose to $17.5 trillion in Q4 2023 – a 3.6% year-over-year increase
- Graph 4: total loan debt, by type, 2019-23
- Credit cards continue to lead in account openings
- Graph 5: number of loan accounts, by type, 2019-23
- Auto loan and credit card delinquencies are on the rise
- Graph 6: percent of balance 90+ days delinquent on loans, by type, 2019-23
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Consumer Insights
- Consumer fast facts
- Personal loan ownership and interest
- Consumers have steadily accumulated more debt since 2022
- Graph 7: types of debt owned, 2022 and 2024
- Banks have captured the lion's share of the rise in personal loan ownership in the past two years
- Graph 8: types of personal lenders used over time, 2022 and 2024
- Hispanic and Black adults have the highest share of personal loan debt
- Graph 9: types of debt owned, by race and ethnicity, 2024
- How lenders can enhance the financial literacy of multicultural consumers
- Reasons for opening a personal loan
- Paying off debt and basic expenses are the two biggest reasons for opening a personal loan
- Graph 10: reasons for opening a personal loan, 2024
- Multicultural consumers are most likely to open a personal loan for debt consolidation and covering basic expenses
- Graph 11: reasons for opening a personal loan, 2024
- Personal loan plans
- Over half of Millennials foresee themselves applying for a personal loan within the coming year
- Graph 12: % of consumers that plan on applying for a personal within the next 12 months, by generation, 2024
- Differing levels of planning confidence from varying income brackets present opportunities for tailored messaging
- Graph 13: % of consumers that plan on applying for a personal within the next 12 months, by household income, 2024
- Factors when choosing a personal loan
- Price remains most important when seeking a personal loan
- Graph 14: top factors when choosing a personal loan, 2024
- Younger adults lean harder on family/friend testimonials when seeking a lender
- Graph 15: top factors when choosing a personal loan – NET – any rank, by age, 2024
- Personal loan behaviors and attitudes
- More consumers are weighing up their options before deciding on a personal lender
- Graph 16: personal loan behaviors over time, 2022 and 2024
- There is a growing preference of branch-based engagement during the lending journey
- Graph 17: personal loan behaviors over time, 2022 and 2024
- Nearly a third of financially struggling consumers have trouble making on-time loan payments
- Graph 18: personal loan behaviors, by financial situation, 2024
- Parents are much more likely to have trouble paying off their personal loans
- Graph 19: personal loan behaviors, by parental status, 2024
- Seven in 10 Millennials would refinance their debt if the rate was appealing enough
- Graph 20: refinancing attitudes, by generation, 2024
- There is a significant opportunity for fintechs to penetrate the multicultural market
- Graph 21: openness to non-traditional lenders, by race and ethnicity, 2024
- The majority of consumers would prefer to take out a loan with their primary bank, but the importance of low rates is ultimately too great
- Graph 22: attitudes towards lenders, by generation, 2024
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Innovation and Marketing Trends
- Marketing and advertising
- Discover highlights how its personal loans can make debt a thing of the past
- SoFi stresses its cost-effective personal loans for those with a penchant for home improvements
- Millennials lead in personal loan usage via traditional banks
- Graph 23: types of personal lenders used, by generation, 2024
- Citi flexed its brand equity as one of the reasons prospects should selected them for a personal loan
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Appendix
- Consumer research methodology
- Generations
- Abbreviations and terms
This report covers the US personal loan industry in detail. Providing data-backed analysis of the personal loan consumer and competitive landscape, this report enables a forward-looking strategy to go to the next level.
Below, we’ve summarized the core areas analyzed and provided hand-selected findings from the full document.
Core Areas Analyzed
- Market drivers impacting personal lending.
- Usage levels of personal loans.
- Types of providers consumers use for personal loans.
- Motivations behind opening personal loans.
- Future plans to open personal loans.
- Key factors when seeking personal loans.
- Behaviors of current personal loan owners.
US Personal Loan Industry Overview
Market landscape
The industry is characterized by a focus on rates, a need for convenience, and a diverse consumer base with varying financial health and preferences. Lenders must compete on both quantitative factors like rates and qualitative factors like customer experience to maintain and grow their market share.
Consumer preferences
- Consumers are less tied to traditional banks and more lender-agnostic, prioritizing rates and terms over existing relationships with lenders.
- The market has seen a consumer shift from a bank-first approach to equal consideration of all lender types, with online banks gaining market share.
- There is a growing preference for branch-based engagement during the lending journey, and seven in ten Millennials would refinance their debt if the rate was appealing.
Opportunity
Lenders should consider financial wellness offerings, such as access to budgeting tools or affordable advisory services, to help consumers manage their finances and build trust and loyalty. This approach is supported by the fact that paying off debt and covering basic expenses are the two biggest reasons consumers open personal loans.
Buy this report today and accelerate your insight strategy. Readers of this report may also be interested in our unbanked and underbanked consumer report.
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Expert Analysis
Leading finance analyst Amr Hamdi delivers expert industry insights with this in-depth report.
Personal lenders must adapt to meet the changing preferences of borrowers while navigating an increasingly competitive landscape.
Amr Hamdi
Finance Analyst
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