Personal Loans

LendingTree Personal Loan Index for the Week of Feb. 14, 2021

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The LendingTree Personal Loan Index is a real-time snapshot of how Americans seek to use this financial product, and whether lenders can meet demand in a time of economic uncertainty and financial crisis for many households and businesses.

The various metrics are indexed to the week beginning Jan. 5, 2020, and are based on the personal loan inquiries received on the LendingTree personal loan platform every week.

Weekly highlights

Those of us waiting for the post-holiday recovery in organic personal loan inquiries will have to wait longer: The number of inquiries dropped by one point to an index value of 37 during the week beginning Feb. 14. The index value represents the number of inquiries that hovered in the high 40s and low 50s from late September through late December 2020 (except for the 41 points during Thanksgiving week), before dropping to 30 during Christmas week. February 2020 — before the pandemic-induced shutdowns — also saw far fewer inquiries: The index value in the week beginning Feb. 16, 2020 was 77, compared to 100 at our benchmark week beginning Jan. 5, 2020.

The most striking change of this week is how little borrowers with credit scores of at least 720 want to borrow. The index value for amounts requested dropped 13 points to 87 — the lowest level in the time period we’ve tracked.

We did see an increase in the number of inquiries intended to refinance cards or consolidate debt, the only loan purpose to grow in popularity this week. Home improvement loans were unchanged, while inquiries for the other tracked categories dropped.

Weekly changes in…

The reasons people are seeking personal loans

Personal loan inquiries, lender matching and lender offers

Personal loan amount requests and offered amounts from lenders

Best APRs offered to prospective borrowers

Average spreads between the highest and lowest offers to the same borrowers

Borrowing trends by employment status

Reasons people are seeking personal loans at the state level

Highlights from previous weeks

Week of February 7

Lenders appeared all in on offering lower rates to higher-score borrowers during the week beginning Feb. 7. Not only did best offered APRs for people with credit scores of at least 720 drop to their lowest levels since the start of the coronavirus pandemic (to an index value of 104), but the spread between the highest and lowest offers to the same potential borrower shrank to the narrowest since July 2020 (index value of 115). In other words, lenders at the high and low ends of the spectrums both dropped their rates for these borrowers.

We saw fewer inquiries from these higher-score borrowers through organic channels than in the previous week, and they requested less money. However, the index values of 68 and 100, respectively, were in line with the week beginning Jan. 24. (As a reminder, this index tracks inquiries and offers to people who reach our platform through organic means — by coming directly to our site, searching for personal loan options, etc. — in order to give a sense of consumer attitudes and needs. But online marketing choices can mean that the actual number of inquiries we receive may be a bit different than what’s shown here, week to week.)

Despite a modest drop of one index point in the number of inquiries we received from all borrowers, the number of inquiries for home improvement loans increased by two points to an index value of 80. We also saw a two point increase to 38 points for vacations and wedding expenses, compared to the previous week. It seems likely that this will be another robust season for home improvement financing and — if travel feels safer this summer — our consumer research indicates we’ll see a rush for extravagant vacations to make up for collective cabin fever.

Week of January 31

The number of personal loan inquiries received on the LendingTree platform through organic channels rose one point to an index value of 39 during the week beginning Jan. 31, 2021. Among borrowers with credit scores of at least 720, the number of inquiries grew by three points to an index value of 71. These represent the highest values since the week beginning Dec. 13, 2020, for all borrowers, and since Dec. 6 for higher-score borrowers. Dec. 6 was also the only other week to beat 70 points since September.

This was a great week for borrowers to enter the market — they were more likely to receive an offer than during any week since July 26, 2020. In fact, only 10 of the 57 weeks tracked in this index beat this week’s odds. This effect was led by higher-score borrowers; they were only as likely to receive an offer in one of the previous 56 weeks, during the week beginning Jan. 3, 2021 when the offer rate was one tenth of one percent higher.

However, these prospective loans are more expensive for many borrowers than in the previous weeks of 2021. Those with scores of at least 720 saw their best offered APRs rise from an index value of 108 to 111. The last time their rates were this high was during the week beginning Dec. 20, 2020.

One bright exception to higher rates are borrowers with credit scores between 680 and 719, who received the best offered APR since the start of the coronavirus pandemic, at 110 index points for the week, down from 117. For context, the average value for this group of borrowers is 132 between March 22, 2020, and January 24, 2021. We noted early in the pandemic that lenders treated these borrowers and those with scores between 640 and 679 erratically, shifting offered rates dramatically from week to week. Best offered rates for the 680 to 719 band spiked to 223 during the week of March 29, from 101 just two weeks earlier.

Week of January 24

The number of organic personal loan inquiries completed on the LendingTree platform increased two index points to a value of 38 during the week beginning Jan. 24. For context, the index value rose two points to a value of 87 during the same period in 2020. At the start of 2020, we saw inquiries through organic channels generally decline from the first week — benchmarked at 100 index points — to the mid-70s through February. Unlike the start of last year, inquiries have remained stable through January 2021.

The best offered APRs to borrowers with credit scores over 680 bounced back to what they were two weeks prior (week beginning Jan. 10), while those with scores between 640 and 679 had their best offered rates jump nine index points to 106, from the previous week beginning Jan. 17. That’s still relatively low for the pandemic period, but it marks the reversal of the downward trend we’ve seen over the last few weeks for those borrowers.

More strikingly, the spreads between the highest and lowest APRs offered to the same prospective borrowers widened considerably for all credit score ranges this week. This indicates that lenders are raising rates, generally, and even more dramatically at the top end of the range.

The increase in inquiries were for major purchases, as well as credit card refinancing and debt consolidation. Business expenses and home improvement loans declined while wedding and vacation expenses stayed flat.

Week of January 17

The number of organic potential borrowers completing personal loan inquiries on the LendingTree platform each week has not budged since the start of 2021; the index value has held at 36 for the fourth consecutive week. The average amounts requested have risen in the new year, however, sitting at 117 points during the week beginning Jan. 17, the highest value since mid-May 2020. Lenders did raise their average offered amounts to 98 points, which is also the highest since mid-May.

Borrowers with credit scores of at least 720 have had an uneventful week (beginning Jan. 17) compared to the first three weeks of the year. However, lenders have upped their offered amounts to an index value of 91 from 87 — despite unchanged requested amounts, compared with the same period last week (beginning Jan. 10).

Home improvement loans are back on the rise, jumping eight index points to 74 during the week beginning Jan. 17. That’s on the low end of their popularity over the last year, but it is an increase since the drop off we saw Christmas week (beginning Dec. 20, 2020). As a percentage of inquiries, home improvement currently holds a 6.8% share, which is the highest of the year. This is somewhat surprising given the home improvement craze we saw through the summer months, when inquiries for that purpose and business expenses were the only purpose that held steady or even increased.

Week of January 10

The number of potential borrowers who organically inquired about personal loans remained unchanged during the week beginning Jan. 10, 2021. The index value was 36, as it has been since the week beginning Dec. 27, 2020. However, the number of inquiries from borrowers with credit scores of at least 720 inched up to an index value of 66 from 65 in the previous week (beginning Jan. 3) and 63 two weeks earlier (beginning Dec. 27).

The gulf between the loan amounts requested by borrowers and those offered by lenders grew dramatically during the week beginning Dec. 27. Borrowers requested the most money during the week beginning Jan. 10 than they have since late May 2020. And while lenders are offering more than in recent weeks (beginning Dec. 27 and Jan. 3), they’re not prepared to raise their offers to the same degree that is being requested. The difference between the index values of requested (116 points) and offered (94 points) amounts is 22 points. The spread peaked at 31 points during the week of July 19, when the index values for amounts requested was 114 and 83 for amounts offered.

At least some lenders are rethinking the declining APRs they’ve offered borrowers within the previous two weeks or so. The best offered rates rose for all credit score bands, except 640 to 679. Perhaps more significant is the spread between the highest and lowest offered APRs increased for borrowers with scores over 680, which indicates that the decision to raise APRs wasn’t limited to lenders at the bottom of the range.

Week of January 3

Prospective borrowers with credit scores of at least 640 were offered the best rates since the middle of March 2020, while those with scores between 620 and 639 received the lowest offers of the year. Prospective borrowers with credit scores under 620 were offered the lowest rates since early October 2020. The spread between the highest and lowest offers to the same borrower rose for those with scores under 640, while the spread closed for those with scores of 640 and over.

Organic consumer interest in personal loans during the first full week of 2021 (started on Jan. 3) was unchanged from the previous holiday week (started on Dec. 27). In comparison, we saw more personal loan inquiries on the LendingTree platform in the first full week of 2020 (our benchmark week which began on Jan. 5) than any other week during 2020. This week’s index value of 36 represents 36% of the number of inquiries received during that week.

The violent riots in the U.S. Capitol on Wednesday, Jan. 6 were likely not a factor in the depressed interest; we received 40% of the inquiries on Thursday, Jan. 7, 2021, as we did on Thursday, Jan. 9, 2020, whereas we received 34% on Tuesday, Jan. 5, 2021, compared to Tuesday, Jan. 7, 2020. In other words, the number of inquiries caught up to the previous year as the week progressed. More likely influences include decreased debt balances and increased personal savings for the financially secure and creditor forbearance for those who are struggling.

The story was a bit different for those with credit scores of at least 720 — the index value for inquiries received on our platform was 65, which is roughly in line with what we’ve seen since the start of November, although lower than the first three quarters of 2020. While the likelihood that these borrowers would match lender criteria was on the high side of typical, they were more likely to receive an offer from a lender than during any other week of the year.

Week of December 27

As expected, the number of personal loan inquiries received on the LendingTree platform was down during the last two weeks of 2020. (Note: the final calendar week of 2020 ran from Dec. 27 through Jan. 2. The first full week of 2021 began on Jan. 3.) The index value for received inquiries was the second-lowest (36) in 2020 during the New Year’s holiday week, which began on Dec. 27; and the lowest during the Christmas holiday week (30), which began on Dec. 20. This compares to an average of 50 index points in the three full calendar weeks between Thanksgiving and Christmas weeks, which ran from Nov. 29 through Dec. 19.

Those with credit scores of at least 720 had a bigger bounce back during New Year’s week, to an index value of 63 from 46 during Christmas week. This compares to an average of 70 in the three weeks between Thanksgiving and Christmas weeks. This group was offered the lowest APRs during the final two weeks of 2020 (Dec. 20 through Jan. 2) since the week of March 22.

We received more inquiries during the first full week of 2020 (our benchmark week, which began on Jan. 5) than any other, with index values dropping immediately to 92 during the second full week (beginning Jan. 12) before declining to the mid-70s by early February. Those with scores of at least 720 kept much closer to the first week’s benchmark until the beginning of the crisis. Assuming typical seasonal patterns hold for this group — and they’re more likely to, given that the recession effects are bifurcated according to pre-crisis wages — they will take advantage of these lower rates to refinance existing debt and otherwise get their finances in order for a fresh new year.

Week of December 6

We saw more inquiries for personal loans from prospective borrowers with credit scores of at least 720 during the week beginning Dec. 6, despite an overall decline in inquiries. The index value of 72 for high-score borrowers is the highest since late September, but the average amount they requested fell to an index value of 89, which is the lowest of the year. For all borrowers, the amount requested also reached the lowest value of the year, at 93 index points.

The only loan purposes for which we received more inquiries than in the previous week were for home improvement loans (jumping from 85 to 91 index points) and vacation and wedding expenses (rising from 46 to 47 index points). Neither loan type has been this popular since late September. These could represent common expenses for people planning to host or visit loved ones during the holiday season, but they could also indicate optimism for spring activities as vaccines hopefully reach the public.

Interestingly, the average spread between the highest and lowest offered APRs received by prospective borrowers decreased considerably for all borrowers except those with scores of at least 720. Despite best offers that were unchanged from the previous week, their average spread rose to an index value of 132 from 121 in the previous week, meaning that some lenders increased their offered APRs substantially while others held steady. Once again, we have to go back to September to see similarly large numbers. While these borrowers still have good options, on average, the mix of more inquiries for traditionally discretionary purposes combined with smaller loan amounts may not sit well with some lenders.

Week of November 29

The number of people seeking personal loans through organic channels rose to their highest levels since the end of September. This is a dramatic increase of 11 index points from last week, which was a holiday week. A better comparison, then, is the four index-point gain to 52 from the week beginning Nov. 15.

Lenders increased the number of offers in response, but they were disproportionately made to people with high scores. To date, prospective borrowers with credit scores of at least 720 had the highest likelihood of receiving an offer compared with the rest of the year. Overall, borrowers were slightly less likely to receive an offer during the week beginning Nov. 29 and the preceding holiday week than at any other time since March, with the exception of one week in July. However, it’s important to put this into context: There have been fewer personal loan inquiries during the coronavirus pandemic, and prime and mid-prime borrowers have been more likely to receive offers since April or May compared with the beginning of the year, while subprime borrowers have generally been less likely compared with the pre-coronavirus period.

Inquiries rose compared with the previous two weeks across all loan purposes that we track here, and there may be some cause for concern regarding larger social and economic trends as the pandemic reaches record-breaking heights through the holiday season. The number of personal loan inquiries we received for business expenses hit an index value of 111, and 4% of unemployed borrowers and 3% of part-time workers selected that reason.

Additionally, the index value for home improvement loans rose by 19 index points, to 85 and the value for vacation and wedding expenses rose by eight points to 46, both of which suggest Americans may be planning on gathering for the holidays. For reference, the last time the index values for those purposes were that high was in October and September, respectively. Of course, those expenses could be part of a larger trend in individuals spending more to make up for a bad year (see: Halloween and Thanksgiving spending); optimism about the coming vaccines; and taking advantage of year-end deals. At 80, the index value for major purchases is the highest it’s been since the end of August.

Week of November 22

Because of the Thanksgiving holiday, the number of personal loan inquiries during the week beginning Nov. 22 were the lowest of the year, dropping to an index value of 41 from 48 in the prior week. This does not a trend make:

  • The number of inquiries in the Sunday through Tuesday of that week was only down 2% compared to the same three days in the earlier week; and
  • There were 2% more inquiries completed on Sunday and Monday and on Thanksgiving Saturday compared to the previous week, respectively.

The holiday drop off was even more pronounced for people with credit scores of at least 720, going from an index value of 70 to 57.

Inquiries were down for all loan purposes, but credit card refinancing and debt consolidation fell off by 19%, while home improvement loans declined by 18%. Business expenses and major purchases both fell by 6.5% compared to the previous week, while vacation and wedding expenses fell by 9%. The catch-all “other” category fell by 10%.

On a day-of-the-week comparison, only on the Saturday following Thanksgiving was the number of loan inquiries for credit card refinancing and debt consolidation greater than the same day of the previous week; there were also more home improvement loan inquiries on the Monday preceding Thanksgiving and the Saturday following relative to the previous week. Interestingly, there were more loan inquiries for major purchases on each day through Wednesday during Thanksgiving week compared to the previous week.

Lenders appear to be all-in on offering better rates to high-score borrowers. The best APRs for those with scores of at least 720 dropped three index points to 117 during the week of Nov. 22, the second-lowest since the week of March 29. The spread between highest and lowest offers for these borrowers was relatively unchanged from the previous week, as the average worst offers for this group also came down. Meanwhile, the best offered rates rose for every credit score band under 680.

Week of November 15

Organic consumer interest and lender availability in personal loans was virtually unchanged during the week beginning Nov. 15. Compared to the previous week, we saw the same number of borrowers who completed loan inquiries for the same average loan amounts, and the same number received lender offers for the same amounts.

Breaking it down further, we saw more loan inquiries come from prime borrowers and fewer come from subprime borrowers. The index value of inquiries from people with scores of at least 720 rose by five points, to 70. We also saw a large uptick in the number of borrowers hoping to finance business expenses, home improvements, major purchases and vacations and weddings.

These gains were offset by the drop in people who hoped to consolidate debt and refinance credit cards. The index value of that category dropped from 41 to 38 — this constitutes a large dent, as those loan purposes comprised 48% of all inquiries in the previous week and 45% in the week beginning Nov. 15. We know that people are planning to spend more for Thanksgiving to make up for a bad year, as they did at Halloween, so it seems likely that families are planning to go all out in December.

Regarding the number of inquiries for business expenses, the week of Nov. 15 saw the highest proportion of prospective borrowers who identified as self-employed (12%). That proportion was 7% through January and began to rise early in the coronavirus crisis, peaking at 10% during the week of March 15 before retracting to 7% in May. The second upward trend began at the end of June, and it has been at or above 10% since the end of August.

Week of November 8

Prospective borrowers completed more personal loan inquiries on the LendingTree platform during the week beginning Nov. 8 compared to the previous week, bringing the index value up to 48 from Nov. 1’s 46. That’s still down from the summer, when index values averaged 56 points. However, the number of borrowers to receive offers remained unchanged — meaning that fewer borrowers received them, despite matching criteria at roughly the same rate as the previous week. This may be because much of the week’s gain comes from subprime borrowers.

Inquiries rose for only two of the loan purposes we highlight. Credit card refinancing and debt consolidation gained six index points to reach a value of 41; this grouping comprised 48% of all inquiry purposes, up from 44% in the previous week. The second purpose that grew was business expenses, by nine index points (from 80 to 89).

While these weekly reports show APRs that rise and fall a bit, our monthly report — which focuses on borrowers with scores of at least 640 who are seeking 36-month terms — shows a clearer downward trend in rates over the month of October. It also shows that borrowers with scores of at least 760 received an average best offer that was 56 basis points higher than in October 2019, and those with scores between 720 and 759 received offers that were 284 basis points higher than in the previous year. The top 10% of borrowers in each credit band over 680, meanwhile, see offers that are less than half the average for their credit band — in particular, that top 10% of prospective borrowers with scores of at least 760 get average best offers of 5.18%.

Week of November 1

The number of organic inquiries from prospective personal loan borrowers on the LendingTree platform increased one point to an index value of 46 during the week beginning Nov. 1. However, despite a modest increase from prime borrowers generally, fewer people with credit scores of at least 720 completed inquiries, sending the index value for these borrowers down to 64. This continues the decline for these borrowers that began in September, and it’s the second week in a row where their index value hit its lowest point of the year.

Interestingly, lenders didn’t scramble for the remaining high-score consumers. The rate of borrowers with scores of at least 720 who matched lender criteria remained essentially unchanged from the previous week, as did the rate who received offers. Meanwhile, borrowers overall were incrementally more likely to match lender criteria and had the highest likelihood of receiving an offer since the first week of August.

The gains came primarily from consumers looking for home improvements (rising nine index points to 83) and major purchases (rising five index points to 65). Major purchases could include holiday purchases, but it remains to be seen whether people will host the usual large holiday gatherings than can spur home improvements and furniture or appliance purchases during the pandemic. Card refinancing and debt consolidation rose one point to an index value of 35, which is still the lowest week aside from the previous.

Week of October 25

The number of organic personal loan inquiries submitted through the LendingTree platform dropped to their lowest level since the week beginning April 26, at an index value of 45. Unlike the previous week when prime borrowers held steady despite an overall decline, decreases in inquiries came from all credit score categories during the week beginning Oct. 25. In particular, the index value for consumers with scores of at least 720 dropped to 66, breaking the year’s previous low of 69 during the week beginning Oct. 11. Perhaps this shouldn’t be too surprising, given the uncertainties surrounding record-breaking COVID-19 cases and the presidential election — not to mention the hours many Americans spent waiting in line to vote early, or participating in other elections activity.

Index values for loan inquiries for major purchases and credit card refinancing and debt consolidation dropped by 13% each to their lowest index values of the year, 60 and 34, respectively. Loans for business purposes dropped by 13% to an index value of 86; at 74, home improvement loans are at their lowest index value since the first week in April.

Changes to best offered APRs were relatively muted, except for borrowers with scores between 620 and 639 who saw their best offers drop by 13 index points to 112. However, best offered rates for this group jumped considerably in the previous three weeks, and the spread between the average high and low offers offered to the same borrowers increased by four points to 180, demonstrating that not all lenders went in on the rate drop for these borrowers.

Week of October 18

The number of personal loan inquiries completed on the LendingTree platform during the week beginning Oct. 18 dropped three index points to an index value of 48. This was the slowest week since July 26, and that week of July 26 was the slowest week since May 10. The drop off was led by subprime borrowers, with a smaller decline from mid-prime borrowers. Prime borrowers held steady from the previous week, and the index value for those with credit scores of at least 720 ticked up a point to an index value of 70.

Among reasons for taking out a personal loan, credit card refinance and debt consolidation fell off the most — from an index value of 44 to 39. In fact, that represents 75% of the total decline in inquiries, as they’re the most popular reasons for personal loans. We received significantly more inquiries for business expenses compared to the previous week, but that purpose only comprised 3.5% of inquiries during the week of Oct. 18.

Unfortunately for consumers, the best APRs offered to prospective borrowers were higher than the previous week for all credit score bands. Those with scores of at least 720 saw their best offers rise five points to an index value of 121, which is still the lowest average since early April, save for the prior week. Those with scores between 620 and 639 saw their average best APRs jump nine points to 125 and the values rose by four points to 114 for those with scores under 620 — the highest values for both credit bands since late April.

The average spreads between highest and lowest offers for all credit bands also increased, suggesting that raised rates were fairly consistent across lenders.

Week of October 11

During the week beginning Oct. 11, consumer inquiries and lender availability were unchanged from the previous week, and borrowers only requested marginally less money. There was a one point dropoff in inquiries from people with scores of at least 720, bringing the index value to 69 — the lowest of the year. 

The drop off has not been spread evenly across loan purposes. Inquiries for home improvement and major purchases dropped by two and four points, respectively. Meanwhile, inquiries for business expenses rose by three points to an index value of 89 and credit card refinancing and debt consolidation inched up to an index value of 44 points. Although that one point increase may seem modest, it actually represents about the same number of inquiries gained by the other three purposes that rose (business, vacation and wedding and other), as credit card refinancing and debt consolidation are far and away the most popular reasons for loans so a larger number comprises a smaller percentage of the total then would the same number of inquiries for a less popular reason.

There was also a four point uptick in inquiries for vacations and wedding expenses. Like the drop offs in home improvements and major purchases, there may be a seasonal element as people plan their (presumably muted) holiday travel plans.

Best offered APRs dropped for borrowers with scores over 680. APRs for consumers with scores of at least 720 dropped a dramatic seven points to 116, which is the lowest value for those borrowers since March. That 6% decline was only matched in the week of Aug. 16, when best offered APRs dropped from an index value of 135 to 127. Best offered APRs rose for all other credit tiers.

Week of October 4

Interest in personal loans, as measured by organic loan inquiries received on the LendingTree platform, slipped to an index value of 51 during the week beginning Oct. 4, from 52  in the previous week. The value for inquiries from borrowers with credit scores of at least 720 hovered at 70 since last week, which is the lowest value of the year.

This lowered consumer interest comes as lenders appear to have increased their appetites to make loans; there were more loan inquiries that matched with lenders (rising to an index value of 50 from 49) and more received offers (an index value of 51 compared to 50 in the previous week). The number of inquiries from people with scores of at least 720 that received offers jumped from an index value of 73 to 75, while the number that matched lender criteria rose from 68 to 69. In fact, 720 and over prospective borrowers were more likely to receive an offer than at any point in 2020.

We received more inquiries for credit card refinancing and debt consolidation compared to the previous week, while all other reasons (including the catchall “other”) declined. This bumped the share of inquiries for card refinancing and debt consolidation up to 48% — it’s the highest proportion since the end of June, but still lower than any week in the first half of the year. 

Interest rates were pretty stable for borrowers with scores of at least 640. Those with scores between 620 and 639 not only saw their rates rise by 10 index points to 109, but also saw their average spreads decrease by three points, meaning that all or most lenders decided to up the prices for these borrowers. Moving in the opposite direction, those with scores under 620 saw their best offered rates drop from an index value of 114 to 107, though their spreads also narrowed.

Week of September 27

We saw the fewest personal loan inquiries of the year from borrowers with credit scores of at least 720, despite the same number of inquiries from all borrowers as last week. The loan reasons of business expenses, home improvement and vacation and weddings dropped off, while credit card and debt refinancing and major purchases remained unchanged. Weddings and vacations declined the most, dropping from an index value of 52 in the previous week to 42 during the week of September 27.

The gap in index values between the average amounts requested and the average amounts offered is the smallest since early May for all borrowers, but unchanged for those with scores of at least 720. Borrowers requested a bit less, dropping from an index value of 104 to 101, while lenders raised their offers from an index value of 84 to 87.

Borrowers — including the reduced number with scores of at least 720 — were slightly less likely to match lender criteria and even less likely to receive offers. 

Week of September 20

Great news for consumers: For all but subprime borrowers, the average best APRs offered to prospective borrowers on the LendingTree personal loan platform during the week beginning Sept. 20 are among the lowest since the coronavirus crisis began. In fact, people with credit scores between 620 and 639 saw the lowest offered rates of 2020, with an index value of 93. The worst offers also came down, as demonstrated by the shrinking spread between the average highest and lowest offers this week, except for people with scores between 640 and 679.

People with credit scores of at least 720 have a current lowest offered APR index value of 124, which is the lowest since the week of April 5. Those with scores between 680 and 719 had an index value of 117 two weeks earlier, which is four points lower than this week’s value of 121, but they otherwise haven’t seen rates this low since the week of March 15. The 106 index value enjoyed this week by people with scores between 640 and 679 is the lowest since the week of March 15. While an index value of 107 for those with scores less than 620 isn’t the lowest since late March, it is five points lower than the preceding three weeks.

The number of people seeking personal loans came down this week and they were more likely to receive an offer, despite matching lender criteria at the same rate.

Week of September 13

The number of organic personal loan inquiries on the LendingTree platform dropped slightly to an index value of 55, from 56 during the week beginning Sept. 13. Values have hovered in the mid-fifties since late May — excepting some volatility during July — immediately preceding the expiration of the unemployment supplement. People with credit scores of at least 720 maintained the same index value from last week. The distribution of loan reasons were nearly unchanged from the previous week.

Once again, the likelihood of receiving an offer declined a bit, despite an increased likelihood of matching lender criteria. This is somewhat curious, given that the declines came disproportionately from subprime borrowers. Those with scores of at least 720 had a slightly higher offer rate.

The best offered APRs were down or the same, except for those with scores between 680 and 719. That group saw a significant drop the previous week (117), and this week’s change (124) brings them more in line with where they were the previous week (129) — although still an impressive five index points lower.

Week of September 6

The number of potential borrowers inquiring about personal loans on the LendingTree platform rose during the week beginning Sept. 6 to an index value of 56 from 54. However, the number of people with credit scores of at least 720 dropped from an index value of 82 to 79. Most of the gains in new inquiries were from subprime borrowers, which probably explains why borrowers were less likely to receive offers than the previous week.

APRs were down for borrowers with scores between 620 and 719 and unchanged for those with scores under 620. Borrowers with scores of least 720 saw their best offered rates increase for the second week in a row. Moreover, the spread between the highest and lowest offers grew for this group, showing that the increase was even greater at the top. Meanwhile, the spread shrunk for borrowers with scores between 680 and 719 while best APRs fell by a dramatic 12 index points to 117, meaning that the top end fell even more.

People with scores of at least 720 are still receiving better offers, on average. This trend could be because borrowers in the higher score band are more likely to request loans for traditionally discretionary purposes — such as home improvements and wedding expenses — than for debt consolidation and credit card refinancing, which is more common among borrowers in the 680-719 band.

Week of August 30

The number of potential borrowers inquiring about personal loans rose during the week beginning Aug. 30 to an index value of 54 from 52. Moreover, those borrowers were more likely to match lender criteria and to receive an offer than in the previous week. The effect was especially pronounced for those with credit scores of at least 720, as the index values for inquiries that matched criteria rose by six points, to 79, and that received offers by eight points, to 84, while the value for overall inquiries from borrowers rose by five points, to 82.

However, terms are not as favorable for most borrowers. The best offered APRs are up for borrowers except those with scores between 680 and 719. The average amount requested by all borrowers dropped by two points, to 107 and by three points, to 97 for those with scores of at least 720. Meanwhile, amounts offered have been hovering at the same levels as the prior week: 87 for all borrowers and 88 (up one point) for the higher score consumers.

The biggest change is why people are borrowing this week. Over the last few weeks, changes in the number of inquiries have been relatively evenly distributed across the purposes we track, but that changed during the week beginning Aug. 30: Gains in inquiries for debt consolidation and credit card refinancing represent 131% of the overall increase in inquiries. Historically, most inquiries on our platform have been for that purpose, but they slipped below the 50% mark in June. Although too soon to tell, we’ve anticipated a recovery following the expiration of the $600 unemployment supplement on July 31 and it may take a billing cycle or two for consumers to seek out ways to reduce their monthly payments, barring additional stimulus payments.

Week of August 23

The number of people seeking personal loans dropped for the second week in a row to an index value of 52 from 55. Concerningly for consumers, despite being slightly more likely to match lender criteria, the rate of potential borrowers who received offers from lenders dropped to the lowest level since late March. However, this requires some context: Potential borrowers have been more likely to receive offers than they were prior to the onset of the coronavirus crisis, yet with worse terms than those who received offers in the first 11 weeks. The best APRs offered to different credit score bands jumped during the week of March 22 and the divide in index values between the average amounts requested and the amounts offered began to widen dramatically during the week of April 5.

The number of people with credit scores of at least 720 who sought loans fell off more sharply to an index value of 77 from 82. In contrast to the aggregate of potential borrowers, this group was more likely to receive offers compared to the previous week. Nonetheless, the number of offers made to these borrowers was down four index points, week over week, to 73.

During the week beginning August 23, borrowers requested more money on average, while lenders offered the same as the previous week. Borrowers with scores of at least 720 requested the same amount of money but were offered less; the index value of offered loan amounts dropped four points to 87 for these borrowers.

Week of August 16

The number of people seeking personal loans dropped to 55 during the week beginning August 16, from an index value of 56 in the week of August 9. The decline was limited to two intended loan uses: business expenses and credit card refinancing and debt consolidation.

The number of people who inquired about loans for businesses purposes dropped off from the year’s highest index value of 126 in the previous week to the still unusually high value of 114. The number of people seeking loans to consolidate their debt or refinance their credit cards dropped to an index value of 40 from 44. Traditionally, debt consolidation and credit card refinancing are the most common reason people seek personal loans on the LendingTree platform, but the percentage of inquiries for this purpose was the lowest of the year at 41.4%, and just one percentage point more than the “all other” category. Meanwhile, the number of people seeking loans for home improvements and major purchases actually rose during the week of August 9, while the number who planned to finance vacations and weddings was unchanged.

For borrowers with credit scores of at least 720, lenders dropped the best offered APRs to the lowest rates since the week of May 3, yet were more selective than the previous week in other ways. While these borrowers were a bit more likely to match lender criteria, they were actually a bit less likely to receive an offer than in the previous week. Similarly, these borrowers increased their average requested loan amounts from an index value of 97 to 100, yet the average amount they were offered by lenders stayed at an index value of 91, week over week.

In a potentially concerning turn, the percentage of prospective borrowers who are fully employed has dropped to the lowest level of the year, at 69.4%. The proportion of borrowers who were fully employed actually rose at the start of the coronavirus crisis in the U.S. and only started to drop to pre-crisis levels (between 70% and 72%) in mid-July. Self-employed and unemployed borrowers have taken a greater share in recent weeks. Given the unusually high volume of loans for business purposes, it’s unlikely that self-employed is being used as a common euphemism for unemployment.

Week of August 9

The number of borrowers seeking personal loans rose for the second week in a row during the week beginning August 9 to an index value of 56, following three straight weeks of decline. Their likelihood of matching lender criteria and receiving offers was somewhat lower, but that could be in part because of the gains in loan queries that came somewhat disproportionately from subprime borrowers. Borrowers with credit scores of at least 720 also increased their queries, reaching an index value of 83, and were actually more likely to receive an offer, despite matching lender criteria at roughly the same rate.

Almost half of those gains went to people wishing to refinance credit cards or consolidate debt. We continue to see an usually high number of inquiries for business expenses — in fact, we received more inquiries for that purpose than during any other week this year. This elevation is especially striking considering how depressed inquiries have been since the start of the coronavirus pandemic, overall.

Amounts requested dropped to an index value of 106 — this is one of only two weeks since February when amounts requested were this low. Offered amounts fell proportionately. Those with scores of at least 720 also requested less money.

It should be pointed out that over the last several months, borrower interest — and the amounts requested — have followed the same rise and fall pattern across the weeks for prime, midprime and subprime. (These ranges correspond to 680 and higher, 620 to 679, and below 620, respectively.) This suggests that external forces are a factor in the ebb and flow of the personal loan market, regardless of traditional measures of creditworthiness.

Week of August 2

The best APRs offered to potential borrowers were up for all credit bands, except for those with scores between 620 and 639. The spread between the average highest and lowest offers made to those borrowers jumped to their highest levels of the year, meaning that the ceiling rose faster than the floor. This is likely a bad sign for personal loan interest rates going forward, but things have been harder to predict since the onset of the coronavirus pandemic.

Borrower inquiries for personal loans on the LendingTree platform rose a bit during the week beginning Aug. 2, but did not make up for the drop-off that began during the week of July 12. Prospective borrowers were only slightly less likely to match lender criteria or receive offers than in the prior week.

Prospective borrowers also requested less money than in the previous three weeks and the amounts offered declined in tandem, on average. It’s notable that over the last 12 weeks lenders appear to have changed offered amounts in reaction to the amounts requested, rather than setting a standard bar (at least in the aggregate). Amounts requested for those with credit scores of at least 720 have remained quite stable since the beginning of July.

We continue to see an unusually large proportion of inquiries from people seeking loans to fund business expenses. This may be a concerning sign in the current environment — both because current, struggling businesses are cut off from other sources of funding, and because some of these inquiries are coming from unemployed and part-time employed people who may be out of other options to make ends meet.

Week of July 26

Loan inquiries through organic channels fell for the third week in a row by 10% to an index value of 48. That’s the lowest value since the week of May 10, when consumer interest began to recover from the nadir during the week beginning April 26. The 11% drop-off for borrowers with credit scores of at least 720 was even more striking: their index value of 76 is the lowest of the year. This seems to be more of a general trend rather than one related to changes in a particular kind of spending as the proportion of reasons potential borrowers sought loans remained within a percentage point compared to the previous two weeks. It remains to be seen how low the number of loan inquiries can go, but much will likely depend on several factors. These can include whether Congress passes another relief package, the spread of the coronavirus and subsequent shutdown orders and if parents leave the workforce to look after their school-age children.

The lack of competition seemed to serve well the borrowers who did inquire about personal loans: The best APRs offered to them were lower than in the previous week and they were more likely to receive an offer. In fact, rates were the lowest they’ve been since mid-March for those with credit scores between 640 and 719. While a positive development, rates remain very high.

Lenders are also offering more money, on average, then they were last week, while borrowers are requesting the same. This made a dent in the gap between the two index values that has been extremely wide since mid-April and pulled even further apart over the previous two weeks. The gap has only grown wider during June and July, so this may be a good sign for consumers, although borrowers with credit scores of at least 720 asked for slightly more and borrowers offered slightly less, opening the gap for that group somewhat.

Week of July 19

We saw a 16% decrease in the number of loan inquiries during the week of July 19 compared to the week of July 12. This also represents a 20% decrease from the week of July 5, which had the highest volume of inquiries since late March. The fall off for those with credit scores of at least 720 was half as large, at 8%. Uncertainty around the coronavirus pandemic, job security, school openings and civil unrest may be amplifying a typical seasonal pattern; we saw a decrease in personal loan interest in the second half of July 2019, as spending for trips, weddings and home projects are often financed earlier in the season, but the dip wasn’t nearly as dramatic then.

The upside for consumers is that they were more likely to receive offers from lenders and the best offers carried lower APRs than the previous week for all credit tiers. The downside is that they’re being offered less money; the gap between the average amounts requested and average amounts offered skyrocketed to 31 index points as prospective borrowers requested more in the week of July 19 than in the previous week while lenders reduced their offered amounts in the same period. For context, the week of July 12 saw the previous largest gap of the year at 25 index points, while the previous three weeks also broke the annual record with a gap of 20 points. However, the gap for those with credit scores of at least 720 has been much smaller and relatively stable over the last several weeks.

Inquiries for various purposes decreased in proportional manner, such that there wasn’t much change in the percentage of inquiries for the various tracked purposes, although credit card refinancing and debt consolidation took just over a percentage point of share from the “other” catch-all category

Week of July 12

The number of personal loan inquiries dipped during the week of July 12 compared to the previous week. Nonetheless, the index value of 63 is the second highest since the week of March 29, behind the week of July 5. Unfortunately, borrowers were less likely to match borrower criteria or receive an offer than they were in the prior week. Loan inquiries from people with credit scores of at least 720 also came down a bit, week over week, but the percentage who received offers dropped more than for prospective borrowers, overall.

The gap between average amounts requested and average amounts offered grew to 25 index points – far and away the largest of the year. The average amount offered stayed the same, but the amount requested jumped five index points to 111.

The number of inquiries for loans to cover business expenses skyrocketed to the highest value of the year – 118 index points. This is especially striking given that inquiries are at 63, overall. This purpose still only constitutes 3% of inquiries but may explain why fewer inquiries received offers: many small businesses remain risky propositions in the current environment. Credit card refinancing and debt consolidation, which usually make up a sizable majority of inquiry purposes, is down to 43% of the total.

Week of July 5

The number of personal loan inquiries received during the week beginning July 5 rose to equal those received early in the coronavirus crisis during the week of March 22. Back then, inquiries were sliding downward before bottoming out at the end of April. This week’s increase of nine index points is the largest jump since the beginning of the crisis.

Lenders also increased their availability – measured in the number of inquiries that matched lender criteria and the number that received offers from lenders – but not to the same degree. However, for prime borrowers the rate of inquiries that received offers was unchanged, and the overall decline is likely because much of the gain came from subprime borrowers. While lenders did offer more offers to subprime borrowers in absolute terms, these consumers were less likely to receive an offer. The loan amounts requested are down a bit, but the gap in index points between amounts requested and amounts offered remains persistently large.

The lowest APRs offered to consumers are moving in the right direction for borrowers with lower credit scores but remain unusually high for borrowers with more desirable credit profiles. In fact, borrowers with scores under 640 received slightly better best offers than they did in the first week of the year. Offers were essentially unchanged for those with scores between 640 and 719, week over week, and down 2% for those with scores of at least 720, but that’s still 30% higher than for the first week of the year. That is especially remarkable given the rock-bottom rates available to high-score borrowers of secured debt.

The variation, or spread, in offers received by the same borrowers remains extremely large, meaning that as high as the best offers are for prime borrowers, plenty of lenders are offering them significantly worse rates.

Changes in demand for loan purposes

  • Consumers hoping to borrow for home improvement projects skyrocketed to an index value of 120 – the highest of the year.
  • Inquiries for major purchases, which could include things like home appliances, rose to the highest level of the year, if only slightly ahead of the week of January 5.
  • Strikingly, the number of inquiries for loans to cover business costs were the second highest of the year, tied with the week of March 15, when many businesses scrambled in the immediate aftermath of mandated shutdowns.
  • The continuous reports of coronavirus cases in several states doesn’t seem to have dampened inquiries for vacations and weddings, which continued to rise during the week of July 5.

Week of June 28

Inquiries from potential borrowers seeking personal loans rose again during the week beginning June 28. However, the number of borrowers that matched lender requirements and the number that received offers fell a bit from the previous week. In other words, potential borrowers were less likely to receive offers, despite prime borrowers representing a disproportionate share of the gain in inquiries. The index value for inquiries is the highest since the week of March 29. The number of inquiries from people with credit scores of at least 720 increased but sits below the recent peak in the weeks beginning May 31 and June 7.

Both average amounts requested and average amounts offered dropped by one index point. Those with scores of at least 720, however, increased the average amount from the previous week, though the average amount offered dropped. This is the third week out of the last four where the index value gap between amounts requested and offered was 10 points for this group of borrowers.

Best offered APRs were down for all but those with credit scores between 640 and 679. Those with scores between 680 and 719 were offered the lowest rates they’ve seen since the week of March 15 – yet best offered rates were 24% lower at that time. However, the average spread between highest and lowest offers received by this group spiked 8% from the previous week. While more lenders are willing to offer this group better terms, plenty are offering worse terms.

Inquiries to fund vacations and weddings continued to rise to levels not seen since early March. Fewer people wanted loans for home improvements, but the number of inquiries to cover business costs rose dramatically. We don’t know whether these business owners hope to expand their businesses or are desperate to keep the lights on.

Week of June 21

Inquiries from potential borrowers seeking personal loans recovered during the week beginning June 21, reverting to the same index value as the week of June 7. As of now, the downturn in consumer interest during the week of June 14 remains a mysterious aberration; we’d otherwise seen an upward trend over the months of May and June compared to April. Much of this week’s recovery was from subprime borrowers, however, and the rate of inquiries from those with credit scores of at least 720 remain at the same depressed level of the previous week.

Amounts requested dropped 5% from the previous week. Borrowers across all major credit profile tiers were interested in borrowing less money. Lenders offered those with scores of at least 720 the same amount of money as in the previous week, which helped to chip away the gap between average offered and requested index values, lowering it from 10 points to four. However, lenders reduced the average amount they were willing to loan to all borrowers, which grew that gap to 20 index points – the largest of the year. 

Best offered APRs fell for those with scores under 680 and remained unchanged for those with scores of at least 680. This is one of only two weeks since the onset of the coronavirus crisis that best offered rates didn’t rise for at least one credit tier (May 17 was the other). However, not every lender was as generous with their terms and the spread between highest and lowest average offers jumped for the same credit tiers who saw their best offers improve.

Index values for the selected loan purposes we track rose across the board, with home improvement seeing the biggest jump – albeit not to where it was in late May and early June. Loans for wedding and vacations continue to recover, which is always a sign of optimism about the future. More concerning is the rise in inquiries to pay for business expenses, as this indicates that business owners may not have access to their traditional capital sources. Self-employed consumers made up a slightly larger share of our inquiry base, and this may be why.

Week of June 14

Borrower interest in personal loans dropped during the week beginning June 14 for the first time since the start of May. The number of loan inquiries fell by four index points, or 7%, since the previous week, to the same value we saw in the week beginning May 24. Interestingly, the number of inquiries that match lender criteria moved in harmony and now also equals the week beginning May 24, while the rate of borrowers who received offers is somewhat higher. The drop-off for those with scores of at least 720 was seven points, or 8%, and their offer rate is a bit lower than it was in the prior two weeks. Average amounts requested and offered were fairly stable, week over week.

While there were reductions across all of the major loan purposes that we track, inquiries for home improvements plummeted from 108 to 87 in the course of a single week and major purchases fell from 91 to 79. Interest in loans to fund vacations and weddings fell seven points after picking up steam over the last few weeks. Nonetheless, its index value of 39 is the second highest only to the previous week of June 7 across a 13-week period. Given that inquiries for credit card refinancing and loan consolidation had a disproportionately small drop of two points, it seems that consumers are particularly backing away from discretionary debt, but it’s too early to tell whether they’re making up the difference by opening or charging up credit cards. Given that roughly 75% of our inquiries come from fully employed people, it seems unlikely that people are battening down the hatches ahead of the coronavirus relief package’s unemployment compensation expiration on July 31.

Best offered APRs came down for all but those with scores under 620. The changes were modest for most, but those with scores between 620 and 639 were offered the best rates since the week of March 15.

New index added for the average offer spread

This week we added an index that tracks the average offer spread – that is, the difference in basis points between the highest and lowest offers users receive, on average, by credit score range. The results are jarring and demonstrate that the personal loan industry has a long way to go before it reaches the kind of staid predictability we saw prior to the coronavirus pandemic.

Spreads are relatively low for those at the top and bottom end of the credit profile spectrum (those with scores of at least 720 and those with scores under 620). Currently however, these spreads are high for those with “fair” and “good” scores – even double what they were in the first week of March for those with scores between 680 and 719. We’ve noted before that lenders have handled these groups erratically, with best offered APRs that bounce up and down from week to week. The much larger than usual spreads between their highest and lowest offers indicate that different lenders have different underwriting criteria (or stomachs) for the same borrowers, and don’t seem to be relying on the same non-score criteria to rate potential borrowers.

Week of June 7

The lowest APRs offered to prospective personal loan borrowers in the LendingTree marketplace rose substantially during the week beginning June 7. Best offered APRs declined following the week of May 10, but current rates are more in line with that week. Those with credit scores of at least 720 were the exception, as they’ve been sitting with the highest rates of the year for the second week in a row. APRs for those with credit scores between 640 and 679 rose by seven index points, as did those with scores between 680 and 719. That represents a growth of 5% and 6%, respectively. These two bands of borrowers have been treated pretty erratically through the crisis, but those with scores between 680 and 719 have seen their best offered APRs yo-yo dramatically from week to week.

The amounts requested by borrowers across all credit profiles reverted back to roughly what they were after dropping during the week of May 31. Lenders have hovered around the same index number for offered amounts for the three week period beginning May 24 despite the fluctuations in amounts requested.

While consumers have varied in how much they would like to borrow during the coronavirus pandemic, in April lenders dropped the amounts they were willing to offer relative to the amount requested – and that negative gap may be the new normal. The difference between amounts requested and offered was the largest of the year for those with scores of at least 720. The average amount requested by this group of prospective borrowers rose by seven index points, yet the average amount offered to them only rose by two points.

The number of people seeking personal loans crept up by one point, and lender availability remained virtually unchanged from the previous week. Loan inquiries for vacations and wedding expenses rose 32% since the prior week. With an index value of 46, the numbers are still low, yet it’s 146% more than the number of inquiries for these purposes during the first week of May. The number of people who sought loans for home improvement projects jumped yet again, making the week of June 7 the third week in a row with more inquiries for that purpose than at any other time during the calendar year; the number of inquiries was 6% higher than the same week in 2019. 

Week of May 31

Consumers who completed a personal loan inquiry were more likely to receive a lender offer in the week beginning May 31 than at any other point in 2020, despite being somewhat less likely to match lender criteria than before the coronavirus pandemic. This follows the trend through May of increasing inquiries that match lender criteria and that receive offers.

While still only 55% of what they were in the first full week of 2020, the number of personal loan inquiries continued to rise since hitting the low point in the week of April 26. In the week beginning May 31, those with credit scores of 720 or higher produced the same number of inquiries as the average number of inquiries in the month of February.

Requested loan amounts are down to their lowest levels since February. Average amounts offered by lenders are at their lowest level of the year, but the index value gap between amounts requested and offered is smaller than the previous three weeks. The effect is even more pronounced for those with credit scores of at least 720; they requested less, on average, than any week this year, except for the week of January 26. The amounts offered to this group were the lowest of the year, yet again the gap was smaller than in the prior two weeks.

Best offered APRs remain high compared to earlier in the year

Best offered APRs ticked up for all credit bands except 640 to 679, but they were actually extremely stable compared to other weeks this year. Overall, there was a change of seven combined index points during the week of May 31, which makes it one of only three weeks in the year to see a single digit change in combined values; the other two were the weeks of February 16 and 23, which had nine index points each.

However, offered rates are nowhere near where they were at the beginning of the year, especially for prime borrowers who received best offers 35% higher than during the first week of the year. Compared to the last week in February, rates for those with scores between 680 and 719 were 38% higher and 41% higher for those with scores over 720. Best offered rates for the former group are down 87 index points from their breathtaking peak during the week of March 29, but they were the highest of the year for the latter group. Best offered rates for those with scores below 680 are also down considerably from their peaks during the week of April 5.

Who is looking to borrow for which purposes

The percentage of prospective borrowers who are fully employed climbed yet again to the highest level of the year. Throughout the COVID-19 crisis, the fully employed have taken up a larger share of the inquiries received on the LendingTree platform. Nearly half of them hope to consolidate existing debt or pay down credit cards. 

Loan inquiries for business expenses spiked during the week of May 31. It’s possible this is in response to the pressure put on local businesses by nationwide civil unrest, but 57% of these inquiries came from people who identified as fully employed, while another 31% came from those who said they were self-employed. Inquiries for weddings and vacations continue upwards, suggesting a level of optimism from American consumers.

Week of May 24

The week beginning May 24 was the second week in a row with positive trends for personal loan consumers and lenders, although we’re nowhere near pre-pandemic levels. It remains to be seen whether the recent nationwide civil unrest will have an effect.

Amounts requested are the lowest since the second week of March, with an index value of 115. The amounts offered only had an index value of 98, but that’s about the same proportion of offered to requested as the previous two weeks. The gap between amounts requested and amounts offered index values really started to open up in the middle of April, when the index value for amounts requested hit its peak at an index value of 127. Lenders have decided to keep that gap wide, even as amounts requested dropped.

Personal loan inquiries continued to grow in May to their highest level since the first week of April, but still a third less than the first week of March. Lenders’ criteria matching and offers from lenders have maintained the same proportion as the previous week, another sign of lenders finding their equilibrium in the current environment. The number of inquiries from those with scores of at least 720 remained largely unchanged over the last three weeks of May, and within the same range they were in mid-February. Lending matching and offers were unchanged.

Best offered APRs dropped for all credit score bands, except for 720 and above, who were offered the second highest rates of the year so far (the highest rate offered was two weeks prior in the week that began May 10). Recent rate declines for other score bands haven’t come close to undoing the spike in loan costs that began in late March, but are encouraging and should fit the needs of more borrowers.

Loans for home improvement surge, debt consolidation loans slowly recovering

Loan inquiries for home improvement charged forth to the highest number of the year so far. Overall, they represent less than 7% of inquiries. 

For the second week in a row, the number of people seeking loans to refinance their cards or consolidate debt rose after falling each week between March 22 and April 19 and then holding flat for four weeks. These prospective borrowers comprise 50% of the inquiry pool, but they floated in the 55% to 60% range prior to the COVID-19 crisis. Meanwhile, inquiries for vacations and weddings have been slowly climbing in May but jumped 19% during the week of May 24 from the previous week. This week’s index value of 32 is 68% higher than the lowest value of 19 in the week of April 26.

The vast majority of new inquiries came from fully employed people, raising their proportion of inquiries to the highest in the year so far, at just under 76.6%. 

Week of May 17

Personal loan inquiries rose during the week of May 17. While there were half the amount of inquiries than at the start of the year, they’re beginning to approach levels we haven’t seen since early April — and it’s possible that consumer interest in personal loans hit its lowest point in late April. Meanwhile, potential borrowers remain unusually likely to receive an offer, despite being less likely to match lender criteria than they were before the crisis. Inquiries from those with credit scores of at least 720 were slightly down, and they were somewhat less likely to match lender criteria or receive offers.

In a first since the start of the coronavirus crisis, the best offered APRs dropped for all credit bands — except for subprime borrowers, who have received the same rates, on average, for three weeks. That, combined with increased offer rates within a smaller pool of borrowers meeting criteria, suggests that lenders are growing more confident in their underwriting and/or they’re having a harder time getting these borrowers to sign on the dotted line. Nonetheless, APRs are still extremely elevated compared to before the crisis.

Amounts requested dropped significantly, from an index value of 125 during the week of May 10 to 119 during the week of May 17. Amounts offered dropped correspondingly, sitting at the lowest index value since the first full week of the year, when the amounts-requested value was 19 index points lower. Borrowers with scores of at least 720 didn’t change their requested loan amounts, on average, but lenders offered less than in the previous week. Perhaps lenders are calibrating the risk associated with more offers and lower APRs by reducing the amount of money to individual borrowers.

The number of borrowers seeking loans for home improvements was greater than any week this year — except one — and is virtually identical to the same week last year. Loans for major purchase inquiries are coming in at about the same clip that they were in February and early March, while loans for weddings and vacations have ticked up modestly to their highest level since the week of March 15.

Seventy-six percent of prospective borrowers are fully employed, while 3% are unemployed. Unemployed consumers were the most likely to seek loans for weddings and vacations, and the second most likely to seek loans for business purposes (behind those who are self-employed). Some out-of-work people may be taking this opportunity to start their own businesses or see it as their best financial hope under current conditions.

Week of May 10

We are adding a new feature to our series to track certain trends by the employment status of prospective borrowers. Seventy-seven percent of prospective borrowers on the LendingTree platform were fully employed during the week of May 10 — the highest ratio of the year. Prior to the coronavirus crisis, the ratio of full-time employees hovered between 70% and 72%, and the recent increase defies conventional thinking about who is seeking out these kinds of debt products.

We also look at the reasons why people with different employment statuses are seeking loans, and how much they would like to borrow. About half of all full-time employees want to pay down cards or consolidate their existing debt, while another 7% are jumping on the home improvement bandwagon. The group most likely to seek home improvement loans is “all other,” and this would include retirees, homemakers and the like. Unsurprisingly, self-employed consumers are the most likely to borrow for business funding; in addition, they and full-time employees request the highest loan amounts. Fifty-three percent of part-time employees and 59% of unemployed prospective borrowers are borrowing for other reasons, which may include things like paying bills. 

Overall, borrowers’ activity remained unchanged from last week, as they had the same number of personal loan inquiries, lender matches and lender offer rate during the week of May 10 as they did a week prior. This is the first time when any of these index values were unchanged, week-over-week, let alone all three series. However, those with credit scores of at least 720 ticked up to essentially what they were two weeks prior.

The best offered APRs for people with scores over 720 rose to record levels this week, and those with scores between 680 and 719 haven’t seen rates this high since early April. In fact, this group of borrowers has had the highest index value in every week save one since March 15, despite yo-yoing up and down each week since mid-April. While best offered APRs for other borrowers did decrease or stay the same, they still remain very elevated compared to the pre-coronavirus period, and overall it’s costing borrowers more to borrow less than they would like to.

Amounts offered to borrowers trended downward, even as amounts requested rose, tying the week of April 12 for the biggest point gap between the two metrics this year; notably, in the week of April 12, the values for both amount requested and amount offered were higher. For context, the index value of amounts requested was the same two weeks prior (125), yet the value for amounts offered two weeks ago was five points higher than the week of May 10 (106 versus 111, on April 26). The gap between amounts requested and amounts offered also widened somewhat for borrowers with scores over 720, reversing the previous trend over the last two weeks, when the gaps nearly disappeared.

Week of May 3

Borrowers submitted roughly the same number of personal loan inquiries in the week beginning May 3 that they did in the preceding three weeks, with index values in the high forties. Index values for those with scores of at least 720 are significantly higher at 86 — slightly down from last week, but up from the year’s low during the week of April 19.

Borrowers were more likely to receive offers than they’ve been at any other week this year, yet they were less likely to match lender criteria than they were prior to the week of March 22. This is a change in pattern from the first two months of the year — when the index values for inquiries matching lender criteria were larger than values for inquiries receiving offers — and may indicate that lenders expect borrowers to turn away offers at higher-than-usual rates.

The index value for people seeking home improvement loans is 91, nearly double the index value for all inquiries (47). Similarly, the index value for major purchases jumped to 80 from 72 during the week beginning April 26. Half of inquirers plan to use their loans for credit card refinancing and debt consolidation, but the index value for these purposes has been sitting at 42 for three weeks — only loans for vacations and weddings have a lower index value.

Best offered APRs dropped considerably for those with scores under 640 (although they are still much higher than pre-crisis) and rose for those with scores over 720 to the second-highest rates of 2020. Rates switched direction yet again for those with scores between 640 and 719, showing continued erraticism for middle-of-the-road borrowers.

Week of April 26

The week beginning April 26 was the calmest for personal loans since the first week of March, with offers and lender availability nearly unchanged from last week. The exception was for those with scores of at least 720, more of whom received lender offers and increased amounts offered.

Only marginally fewer people are seeking personal loans, and inquiries from consumers with scores of at least 720 actually picked up from the previous week. Lenders are meeting these potential borrowers at equitable or greater rates than before the coronavirus pandemic, with prime borrowers more likely to receive offers than at any other week in the year.

While much higher than any point prior to late March, the best offered APRs eased down or remained the same, except for those with scores between 680 to 719 (who saw best offers go up by 9 index points) and with scores between 640 and 679 whose best offers dropped by 10 points. Lenders have treated these groups erratically since the week of March 22: in particular, for scores between 680 and 719, the lowest offered APRs peaked during the week of March 29 at more than double what they were two weeks earlier.

Lenders offered amounts closer to those requested — a course change from the weeks beginning April 12 and April 19, despite similar amounts requested in those weeks. Nonetheless, the index value for offered amounts remains well below the index value of requested amounts. Once again, those with scores over 720 are the exception, with a one point gap between index values for requested and offered amounts, a decrease from the 8 and 9 point gaps of the previous two weeks.

Continuing last week’s trend, loan inquiries for major purchases and home improvement continued to rise last week, while debt consolidation and card refinancing remained unchanged from their lowest levels of the year.

Week of April 19

Personal loan inquiries are still trending downward, but at reduced velocity. The exception is for borrowers with scores of at least 720, who dropped 9 index points to their lowest value of the year. Nonetheless, their index value is 36 points higher than borrowers as a whole.

Best offered APRs eased down, except for those with scores between 640 and 679. Subprime borrowers have the lowest index value for best offers at 116, but a given swing in basis points makes less of a change because their baseline is so high. Baseline best APRs are much more sensitive to smaller absolute movements for those with higher scores, and it’s that midrange of borrowers between 620 and 719 who have seen the most volatility since the end of March.

Loan inquiries for major purchases and home improvement continued to perk up over the last week. Fewer people are seeking to consolidate or refinance existing debt or use funds for business purposes than at any time this year.

The gap between requested and offered loan amounts remains remarkably high, with the amount offered 18 index points below the amount requested. This is also the second week where the index value for offered amounts is lower than the amount requested from those with scores of at least 720. The amount they’re requesting has remained similar since the end of March and is only 3 points above the baseline.

Week of April 12

Personal loan inquiries continued their downward slide into record lows (the lowest index values) for all borrowers, except those with credit scores of at least 720. The number of inquiries from borrowers with the highest scores remains unchanged from last week.

The average best offered APRs fell for all borrowers over the last week, except those with scores of at least 720. Best offered APRs for the highest-scoring borrowers rose 30 index points in the last five weeks. This class of borrowers remain the most active in this environment, and they are receiving offers from lenders at the same rate they were at the start of the year, but at the highest prices of the year.

Loans for major purchases and home improvement picked up five index points each since last week. Fewer people are seeking to consolidate or refinance existing debt or for business purposes than at any time this year, despite the small bump last week in inquiries for the latter purpose.

The gap in index points between loan amounts requested and loan amounts offered was far and away the largest of the year. Amounts offered to borrowers with scores of at least 720 dropped 11 index points since last week, despite this group requesting similar amounts in the prior two weeks. This represents the first time amounts offered to high-score borrowers had a lower index value than the amount requested and, as mentioned above, these smaller loans come with higher APRs.

Week of April 5

Personal loan inquiries continued their downward slide into record lows (the lowest index values) for all borrowers, except those with credit scores of at least 720. While the rate of inquiries from that group is drastically lower than in the second half of March, rates were lower in February.

There was a slight uptick in loans for business purposes and home improvement, possibly because homeowners are using their time at home to complete all of those projects. Home improvement loans do go up this time of year, historically.

The average amount offered was the lowest since February, which opened the index point gap between amounts requested and amounts offered for the first time of the year (besides the one point gap during the last week of February).

Week of March 29

Personal loan inquiries continued their decline to calendar-year lows, although the drop off wasn’t as dramatic as the previous week.

Credit card refinancing and debt consolidation continue to be the most popular reasons to seek a personal loan, suggesting consumers are focusing on getting their finances in order during this crisis, but the number of inquiries for that reason hit the lowest level of the year.

Interest in personal loans for weddings and vacations continue to plummet to an index value of 19, from an index value of 24 in the previous week, 75 at the start of March and 83 at the beginning of February. Traditionally, these loan types are popular this time of year.

Only inquiries from people with credit scores of at least 720 are at their typical levels, following dramatic bursts over the previous two weeks. However, the number of inquiries that matched lender criteria and the number that received offers were at the lowest levels of the year, suggesting that lenders aren’t willing or able to keep up with these usually very desirable borrowers.

The best APRs offered to prospective borrowers accelerated their two week skyward trajectory, with mid-range borrowers seeing the biggest shock. This could drive away borrowers seeking to lower interest rates on existing debt, but those hoping to free up their monthly cash flow may still find these terms acceptable and lenders could find opportunity to peel off high-score borrowers with better (if still high) rates.

The gap between total inquiries and inquiries that matched lender criteria widened to a modest 5 points, but that’s still the biggest difference of the year. Yet, the gap between total inquiries and the subset that received offers is lower than it was from late January through early February.

Week of March 22

Personal loan inquiries dropped to the lowest levels of the year, likely due to a drop in luxury spending combined with greater confidence in covering necessary expenses thanks to the coronavirus stimulus bill signed late March.

Credit card refinancing and debt consolidation are the only loan purposes that didn’t hit their lowest levels of the year, suggesting consumers are focusing on getting their finances in order during this crisis. These categories jumped to 62% of the stated loan purposes from an average of 56% in January and February.

Interest in personal loans for weddings and vacations plummeted to an index value of 24, from an index value of 75 at the start of March and 83 at the beginning of February. Traditionally, these loan types are popular this time of year.

This was also the first week of the year where the number of inquiries that matched lender criteria dropped more than the overall number of inquiries. The number of inquiries that received lender offers also dropped in tandem, but the difference was larger earlier in the year.

Methodology

The weekly number of personal loan inquiries submitted through the LendingTree personal loan platform has been indexed to Jan. 5, 2020, across the following categories:

  • Number of queries
  • Number of those inquiries that were to at least one active lender’s criteria
  • Number of inquiries that received at least one loan offer
  • Number of prospective borrowers who selected one of various purposes for the loan
  • Percentage of borrowers who selected one of various purposes for the loan
  • Average amount borrowers requested
  • Average amount they were offered by lenders
  • Average best offered APR to borrowers within various credit score ranges

The percentage of people seeking personal loans for selected purposes was calculated for each state for the current week and for the same week one year ago.

The inquiries are limited to those received through organic search and offline advertising, as changes in online marketing strategies can alter the number and types of inquiries irrespective of organic interest in this product from the general public.

 

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