What Has Been the Progress and Growth of the Personal Loans Market in Recent Years?
The personal loans market has seen considerable growth due to a variety of factors.
• The market size for personal loans has seen significant expansion in the past few years. The projections indicate an increase from $774.58 billion in 2024 to $855.13 billion in 2025, marking a compound annual growth rate (CAGR) of 10.4%.
The surge experienced during the historic era can be credited to factors like stable economic conditions, lower interest rates, escalating consumer trust, trends towards debt consolidation, and marketing strategies.
What are the Market Size and Expected Growth Rates for the Personal Loans Market?
The personal loans market is expected to maintain its strong growth trajectory in upcoming years.
• The sector of personal loans is anticipated to experience swift expansion in the forthcoming years, escalating to a value of $1278.63 billion by 2029, with a compound annual growth rate (CAGR) of 10.6%.
Factors contributing to this projected expansion during the forecast period include the advent of fintech lenders, increased educational costs, borrowing related to pandemic recovery, an emphasis on financial inclusion, and the rise of the gig economy and self-employment. Key trends likely to characterise the forecast period are the digitalisation of lending, employment of alternative data for credit assessment, bespoke loan products, emergence of peer-to-peer (P2P) lending and initiatives for financial inclusion.
What Are The Essential Drivers Behind The Growth Of The Personal Loans Market?
The progression of the personal loans market is expected to be fueled by the heightened desire for various lending avenues. This heightened urge for lending refers to an increasing need and preference for multiple platforms where individuals and businesses can secure loans or credit. The development of online lending platforms and fintech firms has spurred the demand for personal loan lending venues. With a personal loan, individuals can acquire funds for a plethora of personal requirements without the necessity for collateral. This allows them to cover expenses, consolidate debts, or manage unanticipated financial burdens. Thus, the expansion of lending channels is facilitating the evolution of the personal loans market. For example, as stated by TransUnion, a US information technology firm, in their newly issued Q2 2022 quarterly Credit Industry Insights Report (CIIR) in August 2022, the total balance of personal loans reached a record $192 billion in Q2 2022, surging 31% from the prior year. Subsequently, the personal loan market is set to expand in light of the growing demand for various lending channels.
What Are The Key Segments Within The Global Personal Loans Market?
The personal loans market covered in this report is segmented –
1) By Type: P2P marketplace Lending, Balance Sheet Lending
2) By Loan Tenure: Long Term Loans, Medium Term Loans, Short Term Loans
3) By Tenure Period: Less Than 2 Years, 2 Years To 4 Years, More Than 4 Years
4) By Application: Debt Consolidation, Home Improvement, Education, Other Applications
5) By End User: Employed Individuals, Professionals, Students, Entrepreneur, Other End Users
Subsegments:
1) By P2P marketplace Lending: Consumer Loans, Business Loans, Debt Consolidation Loans, Student Loans
2) By Balance Sheet Lending: Secured Personal Loans, Unsecured Personal Loans, Line of Credit, Home Equity Loans
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How Are New Trends Impacting The Size Of The Personal Loans
Key players in the personal loans sector are continuously striving for technological innovation to maintain their competitiveness, integrating new technologies into their practices. To illustrate, Amplifi Capital, a fintech establishment sited in the UK, unveiled the Reevo Money brand in September 2022, which is distinctively focused on personal loans. Reevo Money provides immediate loan quotes and offers more affordable APRs compared to traditional lending institutions through the implementation of open banking and a cloud-oriented infrastructure. This brand specifically aims to cater to customers who have inconsistent incomes or subpar credit histories, in addition to fresh borrowers or those who fall outside the traditional parameters, with the aid of open banking and a cloud-based system.
Who Are the Key Players in the Personal Loans Market?
Major companies operating in the personal loans market include:
• Wells Fargo & Company
• Marcus by Goldman Sachs
• The Goldman Sachs Group Inc.
• Barclays PLC
• Truist Financial Corporation
• DBS Bank Ltd
• Discover Financial Services
• Citizens Financial Group Inc.
• Navy Federal Credit Union
• Rocket Loans
• OneMain Financial
• SoFi Technologies Inc.
• PenFed Credit Union
• Social Finance Inc.
• LendingClub Bank
• Freedom Financial Network LLC
• Upstart
• Payoff Inc.
• LendingPoint
• Best Egg
• FreedomPlus
• Earnest
• Laurel Road
• Avant LLC
• Prosper Funding LLC
• LightStream
• Upgrade
• Universal Credit
• United Services Automobile Association
• PNC Financial Services Group Inc
• Toronto-Dominion Bank
What are the Regional Insights into the Personal Loans Market?
North America was the largest region in the personal loans market in 2024. Asia-Pacific is expected to be the fastest-growing region in the global personal loans market size forecast period. The regions covered in the personal loans market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
