The personal loan market is expanding rapidly, with millions of Americans relying on these financial tools to meet various needs. By late 2024, total personal loan debt rose to an impressive $251 billion, reflecting steady growth over time. For lenders, understanding the nuances behind these statistics is critical—not just to serve borrowers, but to seize opportunities in this evolving landscape.
The State of Personal Loans in 2025
Americans Owe $251 Billion in Personal Loan Debt
The collective personal loan debt of Americans reached $251 billion in the fourth quarter of 2024, marking a $2 billion increase from the previous quarter and a $6 billion surge year-over-year. This growth underscores the growing reliance on personal loans as a financial tool.
Interestingly, personal loans make up only 1.4% of overall consumer debt, far overshadowed by credit card debt, which stands at $1.211 trillion. With personal loans accounting for 5% of non-housing debt, they have secured a foothold in the lending landscape as a viable option for consumers seeking accessible funds.
24.5 Million Americans Use Personal Loans
By the close of 2024, 24.5 million Americans were holding personal loans, a jump from 23.5 million at the end of 2023. While the number of borrowers dipped during the pandemic, personal loan adoption has been climbing steadily over the past few years, with millions more joining the ranks. This upward trend punctuates a rising demand that lenders cannot overlook.
Average Personal Loan Debt Hits $11,607
The average borrower owed $11,607 in personal loans by late 2024. Notably, that’s slightly lower than the previous year’s average of $11,773, suggesting more responsible borrowing behaviors or improved repayment strategies. Still, delinquency rates remain a factor to consider. At 3.57% for loans 60 days or more past due, personal loan delinquency rates, while decreasing, are still higher than those of other loan types like mortgages or auto loans.
How Borrowers Use Personal Loans
Nearly half of all personal loan borrowers (49.9%) use these funds for debt consolidation or credit card refinancing. This trend points to an opportunity for lenders to market personal loans as a path to financial stability. Everyday bills (10%) and home improvements (6.5%) also feature prominently as reasons, reflecting the diverse financial needs these loans fulfill.
Key Trends Shaping Personal Loan Growth
The personal loan market faced fluctuations during the pandemic, with balances declining by 7.6% in 2020. Yet, in 2021, the market rebounded sharply with a 15.2% increase. The upward trajectory has continued since then, with 2024 seeing a 2.4% year-over-year rise in personal loan balances.
This resilience signals a shift in consumer habits and confidence, as borrowers turn to personal loans to weather financial challenges and invest in big-ticket purchases. For lenders, these patterns indicate a ripe opportunity to cater to a growing and diverse demand.
What This Means for Lenders
The data paints a compelling picture of a market on the rise, creating significant opportunities for lenders who leverage it effectively. To maximize these opportunities, here’s what lenders should take into account:
1. Personal Loans Are Growing—but Competition Is, Too
The steady growth of the personal loan market means greater competition among lenders. Borrowers now have more choices, so standing out in the crowded field requires strategic targeting, competitive rates, and personalized offerings.
2. Addressing Borrower Needs with Precision
The reasons borrowers seek personal loans offer a clear blueprint for lenders. Debt consolidation, in particular, makes up almost half of all loan uses. Lenders who promote their products as tools for managing or eliminating debt will resonate with a significant segment of the market.
3. Personal Loan Delinquency Rates Demand Better Risk Management
Although delinquency rates for personal loans remain higher than those for auto loans or credit cards, the decline from prior years highlights an opportunity to lower this further. Lenders can mitigate risk by leveraging advanced data analytics to identify borrowers with lower likelihoods of default.
4. Timing Is Critical
The rising number of borrowers presents an excellent opportunity for lenders—but reaching these consumers at the right moment is key. Understanding when a consumer is actively seeking credit can significantly boost conversion rates.
Why Lenders Should Partner with DataVue
Maximizing the opportunities in the personal loan market is about more than offering competitive products. It’s about leveraging data to understand borrower behavior, anticipate needs, and act decisively. This is where DataVue shines.
DataVue’s Unique Value for Lenders
Unmatched Precision at Scale
DataVue helps lenders harness consumer data, mortgage records, and property insights to identify high-quality borrowers who perfectly match your lending criteria. By applying machine learning models, lenders can anticipate borrower needs, identify intent, and make informed credit offers.
Imagine being able to predict who will apply for a loan in the next two to four months. DataVue’s proprietary Borrower Propensity Model makes this not only possible but also scalable. With access to trended financial data and predictive analytics, lenders can engage high-value prospects at the optimal time, minimizing acquisition costs while maximizing profitability.
Smarter Targeting = Higher Returns
Traditional marketing often casts a wide net, wasting resources on individuals unlikely to qualify or take action. DataVue eliminates this inefficiency by focusing on the “Movable Middle”—borrowers who meet your credit criteria and require just a nudge to apply. This targeted strategy offers higher conversion rates, lower delinquency risks, and a better return on investment.
Optimized Borrower Insights and Risk Management
By supplementing static data with trended insights, DataVue provides a clearer picture of a borrower’s financial trajectory over time. This allows lenders to better predict repayment behaviors and refine their risk models accordingly. With the right insights, offering competitive rates to the right prospects becomes less of a gamble and more of a science.
Real Results with DataVue
Recently, we helped a lender identify over 60,000 qualified refinance prospects across 22 states. These candidates all met strict criteria, including credit scores of 640+, specific debt thresholds, and favorable property attributes. By leveraging DataVue’s tools, the lender achieved substantial improvements in both conversion rates and customer acquisition costs.
Similarly, DataVue’s ability to generate “Firm Offers of Credit” allows lenders to preselect audiences, ensuring every marketing dollar spent targets prospects with the highest potential to convert.
The Competitive Edge Lenders Need
Staying competitive in lending requires focus. Casting the widest net is inefficient and often results in higher default risks. Instead, success lies in precision targeting, advanced risk assessment, and actionable insights.
DataVue equips lenders with tools to fine-tune every aspect of this process. From predictive analytics to dynamic borrower segmentation, lenders can focus on quality over quantity, improving both profitability and long-term sustainability.
Key DataVue Advantages
- Borrower Propensity Modeling predicts loan applications with unmatched accuracy.
- Custom Machine Learning Models ensure solutions tailored to your specific goals.
- Trended Data Analytics provide insights into financial trajectories, not just static history.
- Real-Time Borrower Alerts enable prompt, effective outreach.
- Proven Success in lowering acquisition costs and boosting conversions.
Act Now, Transform Tomorrow
The personal loan market is growing, but so are the challenges. Borrower expectations are increasing, and the competition for attention is intensifying. Now more than ever, lenders need precise, scalable solutions to stay ahead.
DataVue isn’t just a tools provider; it’s a strategic partner that equips lenders to thrive in a dynamic market. By combining advanced analytics, tailored machine learning models, and real-time insights, DataVue transforms credit data into actionable strategies. Whether your goal is to minimize risk, optimize marketing, or boost profits, DataVue offers a smarter way forward.
Explore what DataVue can do for your lending business today. Contact us for a strategy call.
