Personal Loan Data and Statistics (2024) (2024)

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Personal Loan Data and Statistics (2024)? ›

23.5 million Americans have a personal loan as of the first quarter of 2024, up from 22.4 million a year earlier. That's a 4.9% year-over-year increase. Personal loan debt makes up 1.4% of outstanding consumer debt as of the first quarter of 2024. It accounts for 5.0% of nonhousing consumer debt.

According to a Bankrate study, the average personal loan interest rate is 12.35 percent as of Sept. 11, 2024. The rate you get depends on factors like your credit score, the type of lender you apply with and even where you live.

Average personal loan rates started at 10.37 percent in January 2023. Rates continue to climb in 2024, currently standing at 12.38 percent as of July 2024. Personal loan rates may drop if the Fed starts cutting rates in the second half of 2024.

Some banks continue to tighten credit standards in 2024, according to the latest Fed survey, taken in January. Tighter credit leaves potential borrowers in a uniquely unpalatable position: Loans cost more, and it's harder to get one. Consider the standard 30-year mortgage.

The total number of personal loans and Americans with consumer loans has also increased, but at a slower rate than total outstanding balances. As of Q2, TransUnion estimates there were more than 27 million unsecured personal loans taken out by about 22.7 million Americans.

The Federal Reserve is expected to lower rates by at least 100 basis points through the end of 2024. As such, primary mortgage rates could fall by as much as 60 bps over the next year — and by even more if the rates market begins to price in more cuts than are currently expected.

Following the August base rate cut, mortgage rates on fixed rate mortgages have been falling as lenders slashed rates. Many experts are predicting one further base rate cut in 2024 and for interest rates to fall to around 4% by the end of next year.

Anthony Capizzano, senior vice president of consumer lending at Axos Bank, predicts the federal funds rate will likely fall between 0.25% to 0.50% in 2024. He also says some lenders have already reduced personal loan rates in anticipation of rate cuts.

Before deciding to get a personal loan, you must consider potential downsides, such as high interest rates, steep fees and a hit to your credit score if used incorrectly.

Will student loan interest rates go up in 2024? ›

Undergraduate loans now carry a rate of 6.53% for the 2024-2025 school year, up from 5.50% last school year. Graduate direct loans have a rate of 8.08%, up from 7.05%. And PLUS loans for grad students and parents of undergraduates rose to 9.08%, up from 8.05% this year.

Although there are various reasons for getting denied when applying for a personal loan, five of those reasons include a low credit score, low income, a high debt-to-income ratio (DTI), an unstable work history, or an inability to meet basic requirements.

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 $1.115 trillion in credit card debt, comprising 6.3% of outstanding debt.

If you already have one personal loan, you can take out as many additional loans as lenders are willing to give you. Although there are no laws restricting the number of loans you can have at once, lenders tend to have individual policies limiting the number of loans and amount of money they will allow you to borrow.

Unsecured personal loans are common among lenders and don't require collateral. Secured personal loans are less common and require collateral — but usually offer lower interest rates.

Borrowers with low income or a history of missed payments tend to get the highest interest rates because there is no certainty that they will be able to make full payments. The length of the loan: Lenders make more money from long-term loans than short-term ones because the debt has more time to accrue interest.

What is a high-interest loan? A high-interest loan has an annual percentage rate above 36%, the highest APR that most consumer advocates consider affordable. High-interest loans are offered by online and storefront lenders that promise fast funding and easy applications, sometimes without checking your credit.