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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  1. 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
  2. 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
  3. 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
  4. 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
  5. Appendix

    • Consumer research methodology
    • Generations
    • Abbreviations and terms

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