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Key points included

  • Of all the reasons people take out personal loans, refinancing other debt is the most popular
  • Credit card companies are fighting a war on two fronts

Covered in this report

Consumer household debt continues to grow unabated, having risen in Q2 2019 for the 20th consecutive quarter, now totaling $13.86 trillion. The share of credit card balances transitioning into delinquency is increasing, and consumers are seeking ways to alleviate their financial strain. Marketing in the personal loan space has grown at a feverish pace in recent years as new lending players flooded the market, and now traditional banks are responding with their own redesigned installment loan products.

Expert analysis from a specialist in the field

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

US consumers are carrying a larger debt burden than ever before, and some individuals have turned to personal loans to seek relief from high interest credit card debt and student loans. A little over 10% of consumers currently have a personal loan, and similar numbers are interested in obtaining one Chris Shadle
Financial Services Analyst


What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Market overview
          • Key Takeaways
            • Of all the reasons people take out personal loans, refinancing other debt is the most popular
              • Figure 1: Reason for personal loan, September 2019
            • It’s the rates!
              • Figure 2: most important factors when choosing a personal loan, September 2019
            • Credit card companies are fighting a war on two fronts
              • Figure 3: Attitudes toward personal loan attributes, by age, September 2019
            • What it means and what’s next
            • The Market – What You Need to Know

              • Consumer debt > $4 trillion
                • Credit card, auto loan delinquencies on rise, student loans remain problematic
                • Market Size

                  • Consumer debt continues climbing to new heights
                    • Figure 4: Total US non-housing consumer debt, by type, Q2 2003-Q2 2019
                  • Credit card and auto loans have rebounded since the recession
                    • Figure 5: Number of credit card & auto loan accounts, Q2 2003 – Q2 2019
                • Market Perspective

                  • 90+ day delinquencies provide mixed signals
                    • Figure 6: Percent of balance 90+ days delinquent, by debt type, Q2 2003 – Q2 2019
                  • Card issuers have welcomed spending
                    • Figure 7: Credit card balance, total limit, and available limit, Q2 2003 - Q2 2019
                • Key Players – What You Need to Know

                  • New products blur lines between loans and credit cards
                    • Poor financial decision-making shouldn’t be enabled
                      • Rise of the microlender
                      • What’s Happening

                        • Personal loan direct mail has a familiar cast of characters
                          • Figure 8: Direct Mail Volume: Top Ten Personal Lending Mailers, June 2017 - June 2019
                        • Traditional brands establish themselves in personal loans space, blur lines between cards and lending
                          • Citibank – Citi Flex Loan
                            • Figure 9: Citi Flex Loan offer, September 2019
                          • American Express – Pay it Plan it
                            • Figure 10: American Express Special offer, hilton , February 2019
                          • Incentivizing loans with gift cards
                            • Figure 11: Upstart personal loan offer, October 2019
                            • Figure 12: Citizens Bank personal loan offer, October 2019
                            • Figure 13: Payoff personal loan offer, September 2018
                            • Figure 14: Best Egg personal loan offer, June 2019
                        • What’s Struggling

                          • Debt is fundamentally altering consumer attitude and behavior
                            • Figure 15: Attitudes toward debt, by education level, April 2019
                            • Figure 16: How extra money is spent – Paying off debt, by age, February 2019
                          • The underlying reason people need these loans, and the ensuing bubble?
                            • Figure 17: Earnest Homepage, November 2019
                        • What to Watch

                          • Microlending is quickly becoming a viable credit card alternative
                            • Figure 18: Attitudes toward personal loan attributes, by age, September 2019
                          • Klarna
                            • Figure 19: Klarna Homepage, November 2019
                          • Fintech will extend credit to new segments
                            • Figure 20: Attitudes toward Fintech, credit, and society, by generation, August 2019
                        • The Consumer – What You Need to Know

                          • More than one in 10 consumers have a personal loan
                            • Most are borrowing to refinance other debt
                              • Rates are all the rage
                                • Loans are a young person’s game
                                  • Personal loans can’t solve the systemic issues
                                  • Types of Debt

                                    • Credit cards are the most common source of consumer debt
                                      • Figure 21: Most popular types of consumer debt, September 2019
                                    • Who has personal loans? (In brief: Millennials)
                                      • Figure 22: Personal loan ownership, by generation, September 2019
                                      • Figure 23: Personal loan vs line of credit ownership, by household income, September 2019
                                    • Where are they obtaining their loans? (Banks, and a bevy of other players)
                                      • Figure 24: Source of personal loan, September 2019
                                  • Reason for Personal Loan

                                    • Refinancing other debt is the top personal loan use case
                                      • Figure 25: Reason for personal loan, September 2019
                                    • Men and women open loans for (slightly) different reasons
                                      • Figure 26: Gender differences in reason for opening a personal loan, September 2019
                                      • Figure 27: Fiona personal loan offer, November 2019
                                    • TURF Analysis – how to market personal loans
                                      • Figure 28: TURF Analysis – Purpose of loan, September 2019
                                      • Figure 29: Table - TURF Analysis – Purpose of loan, September 2019
                                    • Methodology
                                    • Factors in Choosing Lender

                                      • Rates reign supreme
                                        • Figure 30: most important factors when choosing a personal loan, September 2019
                                      • After rates, reputation is on the line
                                        • Figure 31: personal loan application factors, by highest-ranked responses, September 2019
                                        • Figure 32: Attitudes toward personal loan attributes, by age, September 2019
                                      • For young borrowers, personal recommendations carry weight
                                        • Figure 33: Importance of interest rate and personal recommendation, by age, September 2019
                                    • Interest in Loan Products

                                      • About one in 10 consumers are interested in a personal loan
                                        • Figure 34: Interest in various loan products, September 2019
                                      • Interest in lending products decreases with age
                                        • Figure 35: Interest in any loan products, September 2019
                                      • CHAID analysis – ideal loan consumer
                                        • Figure 36: Interest in loan products – CHAID – Tree output, September 2019
                                        • Figure 37: Interest in loan products – CHAID – Table output, September 2019
                                      • Methodology
                                      • Attitudes & Behaviors toward Lending

                                        • Personal loans aren’t necessarily solving the underlying issues
                                          • Figure 38: Financial attributes of personal loan borrowers, September 2019
                                        • Debt makes consumers uncomfortable; Millennials are more resigned to it
                                          • Figure 39: Attitudes toward debt, by generation September 2019
                                        • Millennials are the target audience for personal loans
                                          • Figure 40: Attitudes toward personal loan, by generation September 2019
                                      • Appendix – Data Sources and Abbreviations

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

                                                This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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                                                  Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

                                                • Data

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                                                Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.