Personal Loan Statistics: 2023

According to the latest industry data, 22.7 million Americans owe a collective $232 billion in personal loans, more than double the $117 billion owed in 2017. That still amounts to a fraction of what is owed for mortgages, auto loans and credit cards but is proof of the growing popularity of personal loans.

The numbers behind the trends can reveal how borrowers use personal loans — and how they impact consumers’ finances. Check out our personal loan statistics for a deeper look.

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Key facts

• Americans owe $232 billion in personal loan debt as of the second quarter of 2023, up from $225 billion in the previous quarter and $191 billion a year earlier. That’s a 3.1% quarter-over-quarter jump and 21.5% from the previous year.
• 22.7 million Americans have a personal loan as of the second quarter of 2023, up from 21.0 million a year earlier. That’s an 8.1% year-over-year increase.
• Personal loan debt makes up 1.4% of outstanding consumer debt in the second quarter of 2023. It accounts for 4.9% of non-housing consumer debt. To compare, Americans owe $1 trillion in credit card debt, comprising 6.0% of outstanding debt.
• The delinquency rate (60 days or more past due) for personal loans is 3.62% as of the second quarter of 2023. That’s an increase from 3.37% a year ago.
• The average balance of a new personal loan was $8,018 as of the fourth quarter of 2022 (the latest available). A year before that, the average balance on a new loan was $7,104.
• Most borrowers (51.1%) take out a personal loan to consolidate debt or refinance credit cards. The next-closest reason is home improvements (7.9%).

Americans owe $232 billion in personal loan debt

Personal loan borrowers owe $232 billion in debt as of the second quarter of 2023 — the highest in the 17 years for which data is available. That’s a substantial 21.5% increase from the second quarter of 2022, when Americans owed $191 billion.

Here’s an overview of the amounts Americans have owed on personal loans over time.

22.7 million Americans have a personal loan

As of the second quarter of 2023, 22.7 million Americans have a personal loan, up from 21.0 million in the second quarter of 2022.

The number of people with loans dropped during the pandemic from the previous height of 20.8 million at the end of 2019 to 18.7 million in the second quarter of 2021. That was the start of six increases in a row before the number dipped from 22.5 million in the fourth quarter of 2022 to 22.4 million in the first quarter of 2023.

Personal loan growth returns after dropping early in pandemic

The massive, nearly-decade-long rise in personal loan debt ended in 2020, thanks to the pandemic. Personal loan balances fell 7.6% in 2020, marking the first decline since 2011.

But personal loan debt balances spiked 15.2% in 2021, reversing the previous year’s downward movement. Balances are up 3.1% in the second quarter of 2023 compared to the prior quarter and 21.5% year over year.

Personal loans account for 1.4% of consumer debt

Personal loans continue to make up the smallest sliver — just over 1% — of consumer debt held by Americans despite the substantial growth over the past decade.

Comparatively, Americans owe $1 trillion in credit card debt, comprising 6.0% of outstanding debt.

If you remove mortgages from the picture, personal loans account for 4.9% of non-housing debt.

3.62% of personal loan accounts are 60 days or more past due

An estimated 3.62% of personal loan accounts are 60 days or more past due as of the second quarter of 2023 — an increase from 3.37% as of the second quarter of 2022. That figure is significantly higher than rates for other common loan types, such as mortgages (0.89%), auto loans (1.71%) and credit cards (2.06%). (Note that credit card delinquencies are tracked at 90 or more days.)

Despite personal loan delinquency rates being high compared to other loan types, it’s interesting to compare today’s figures to the delinquency rate of 4.77% on consumer loans in 2009 when the Great Recession ended.

Average balance on new personal loans passes $8,000 — and the APRs owed

The average balance on new personal loans first crossed the $8,000 threshold in the second quarter of 2022 before coming back down a bit in the third quarter.

The average balance on new personal loans was $8,018 as of the fourth quarter of 2022 (the latest available), compared with:

• $7,104 in the fourth quarter of 2021
• $5,739 in the fourth quarter of 2020
• $6,211 in the fourth quarter of 2019

On average, borrowers with credit scores of 680 or higher see personal loan APRs competitive with the credit card APRs they would receive.

The average APR on new credit card offers is 24.37% as of August 2023, with average minimums and maximums between 20.94% and 27.79%. As the chart below shows, those with excellent credit who apply for a personal loan are getting a far better rate than that.

Personal loan statistics by borrower credit score

Source: LendingTree user data on closed personal loans for the second quarter of 2023.

However, subprime borrowers — who may not be eligible for other credit — generally have to pay far higher rates on their personal loans (if they even have loan offers extended to them).

Consumers mostly borrow personal loans to pay down debt

More than half (51.1%) of LendingTree users seek personal loans to pay down debt, including 35.2% for debt consolidation and 15.9% for refinancing credit card debt.

The next most popular uses for a personal loan are paying for home improvements (7.9%) and funding major purchases (5.8%).

These personal loan statistics underline how important it is for borrowers to practice caution and wisdom when using this product.

Borrowers who use this product can come out ahead — but only if they weigh the decision, find a favorable personal loan and practice responsible debt management.

Expect personal loan debt to keep growing

Personal loan debt is growing rapidly, and that’s unlikely to change anytime soon. That’s because credit card debt is rising, too, and will likely continue to do so for the foreseeable future.

When that happens, people look to personal loans to help them control their credit card debt, and they can be great tools for that. If you have really good credit, a 0% balance transfer credit card might be a better choice for consolidating and refinancing other debts. Still, a personal loan can also be a strong option.

That said, personal loan APRs may continue to climb regardless of the Fed’s decisions as banks continue to manage their own risk in an uncertain economic environment. Delinquency rates will likely continue to climb, too, as more Americans struggle with lingering inflation, higher interest rates and other economic headwinds.

Still, it’s important to understand that people don’t only take out personal loans when they’re struggling. Many use them when remodeling their home, starting a business, planning a wedding or vacation and making other big purchases. They do it because they feel comfortable about their financial situation to take on short-term debt. That’s likely the situation for millions of Americans today, and those folks will also help drive consumer demand for personal loans higher.

Add all this up, and personal loan growth will likely continue in the coming months. Many folks will struggle with managing those loans, especially if economic conditions worsen. However, those who handle these loans well — especially those who use them to knock down their debt — can make a real difference in their financial situation, and that’s a big deal.

Sources

• TransUnion
• The Wall Street Journal
• Federal Reserve Bank of New York
• LendingTree