United States Personal Loan Market Overview, 2030

The U.S. Personal Loan Market has witnessed significant growth over the past few years, driven by a variety of factors, including low-interest rates, increased consumer awareness, and changing financial behaviors. Personal loans have become a popular financial product, offering consumers the flexibility to consolidate debt, finance major purchases, cover unexpected expenses, and fund home improvements. With a growing trend toward financial independence and a shift away from traditional credit cards, more consumers are opting for personal loans as a more manageable alternative. Financial institutions, including banks, credit unions, and online lenders, have expanded their offerings to meet the growing demand for personal loans, providing competitive interest rates and flexible terms. The rise of digital lending platforms and the availability of personal loans online have made the borrowing process more accessible and convenient, especially for consumers who may not have qualified for traditional loans. As a result, a growing number of borrowers are taking advantage of the speed and ease of securing loans through online lenders, which has further driven market growth. Additionally, personal loans have become an attractive option for debt consolidation, as borrowers seek to simplify their financial obligations by combining multiple high-interest debts into one lower-interest loan. The increasing adoption of personal loans for various financial needs is expected to continue, supported by an improving economy, growing consumer confidence, and ongoing innovations in the lending landscape.

According to the research report, ""US Personal Loan Market Overview, 2030,"" published by Bonafide Research, the US personal loan market is anticipated to grow at more than 16.03% CAGR from 2025 to 2030. The market dynamics of the U.S. personal loan industry are influenced by several factors, including the economic climate, interest rates, and regulatory changes. The U.S. economy's performance, particularly in terms of employment rates and disposable income, has a direct impact on consumer borrowing behavior. During periods of economic stability, more consumers are inclined to take out personal loans, confident in their ability to repay. However, during economic downturns or periods of uncertainty, loan demand may fluctuate as consumers become more cautious about their spending and borrowing habits. Interest rates are another key determinant of personal loan growth. When interest rates are low, borrowing becomes more attractive, leading to an increase in personal loan applications. Conversely, when interest rates rise, borrowing may slow down as consumers become more hesitant to take on debt. Furthermore, regulatory changes by entities such as the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve play a crucial role in shaping the landscape of personal lending in the U.S. Stricter regulations aimed at protecting consumers from predatory lending practices can encourage responsible lending and borrowing, while also increasing transparency in the loan process. Lenders are also incorporating advanced technologies, such as artificial intelligence and machine learning, to assess borrower risk more accurately and improve the overall customer experience.

The US personal loan market is segmented by loan type into secured and unsecured loans, each catering to different consumer needs and financial situations. Secured loans are backed by collateral such as a car, home, or other valuable assets, which reduces the lender's risk and, in turn, results in lower interest rates for borrowers. These loans are ideal for individuals who may not have a strong credit history but have assets to secure the loan. The lower interest rates offered by secured loans make them an attractive option for those who need larger amounts of money and are willing to put up collateral to access better loan terms. On the other hand, unsecured loans do not require any collateral, making them a more accessible option for borrowers who prefer not to risk their assets. These loans, however, come with higher interest rates due to the increased risk for lenders. Unsecured personal loans are commonly used for consolidating debt, financing home improvements, or covering emergency expenses. Since they are not backed by collateral, the approval process for unsecured loans typically depends heavily on the borrower’s credit score and overall financial health. In recent years, there has been a rise in unsecured loans provided by both traditional banks and emerging digital lenders, driven by greater financial inclusion and the need for fast, flexible credit options. Both types of loans play crucial roles in the market, with secured loans appealing to those with valuable assets seeking better rates and unsecured loans catering to borrowers who value flexibility and quicker processing, despite higher rates.

The source of personal loans in the US is varied, with banks, non-banking financial companies (NBFCs), and digital lenders playing pivotal roles in providing credit to consumers. Banks are traditional lenders and often offer the most competitive interest rates and longer loan tenures, making them a popular choice for borrowers with a solid credit history. These financial institutions typically provide secured loans, but some also offer unsecured loans, especially for those with strong credit scores. Banks are well-regulated and offer stability, which attracts consumers seeking trusted, established lenders for their personal loan needs. Non-banking financial companies (NBFCs) have emerged as significant players in the US personal loan market, especially for consumers who may not qualify for loans from traditional banks due to poor credit history or irregular income. NBFCs focus on providing quick access to loans with more flexible terms, though they tend to charge higher interest rates compared to banks. They cater to a broader spectrum of borrowers, including those with subprime credit scores or those who need loans quickly for emergencies. Digital lenders, a newer and rapidly growing segment, leverage technology to streamline the loan application process, making it faster and more convenient for borrowers. Digital platforms often use alternative data, such as social media profiles, transaction history, and behavioral data, to assess creditworthiness, making personal loans accessible to a wider audience, including younger or first-time borrowers. These lenders are particularly appealing to tech-savvy consumers looking for quick approvals and disbursements, and they typically provide unsecured loans with flexible terms. The rise of digital lending has reshaped the personal loan landscape, offering faster, more personalized loan options to a larger demographic.

The interest rate on personal loans in the US varies depending on whether the loan is offered with a fixed or variable rate. Fixed-rate loans are structured so that the borrower’s interest rate remains constant throughout the life of the loan, providing predictability in monthly payments and making it easier for borrowers to budget for their debt repayment. Fixed-rate loans are often preferred by consumers who want stability and protection from potential interest rate increases. These loans are particularly attractive for borrowers who value certainty in their repayment terms and who may be borrowing for longer periods. They are commonly offered by banks and some digital lenders, with interest rates determined by the borrower’s creditworthiness and the loan term. In contrast, variable-rate loans are subject to fluctuations in the market interest rates, meaning the borrower’s interest rate can change over time, typically in response to changes in benchmark rates such as the prime rate or the LIBOR. While variable-rate loans can offer lower initial rates compared to fixed-rate loans, the potential for rate increases over time makes them riskier for borrowers who may face rising monthly payments if interest rates increase. These loans can be appealing to those who expect interest rates to remain stable or decrease over the loan term. Variable-rate loans are typically offered by digital lenders and non-bank financial institutions, as they may appeal to a more risk-tolerant borrower demographic. Overall, both fixed and variable-rate loans cater to different borrower preferences, with fixed rates providing security and predictability, while variable rates offer flexibility and potentially lower initial costs but come with a degree of uncertainty.

Considered in this report
• Historic Year: 2019
• Base year: 2024
• Estimated year: 2025
• Forecast year: 2030

Aspects covered in this report
• Personal Loan Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Loan Type
• Secured Loans
• Unsecured Loans

By Source
• Banks
• Non-Banking Financial Companies (NBFCs)
• Digital Lenders

By Interest Rate
• Fixed Rate
• Variable Rate

The approach of the report:
This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual report of companies, analyzing the government generated reports and databases. After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us we have started verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to agriculture industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.