Personal Loan Statistics for 2022

Personal loan debt is higher than ever in 2022. U.S. consumers have $177.9 billion in unsecured personal loan balances, and the average balance per loan is $9,896.

Even with the large amount of debt, there are a couple of silver linings. Interest rates on personal loans are low, so there are opportunities to get a good deal for those who need a loan. Delinquency rates may not be at their absolute lowest, but they're better than they were before the COVID-19 pandemic.

There are a variety of factors that affect personal loan balances and delinquency rates. As you'll see in the data below, a consumer's credit score, where they live, and the type of lender they choose all play a part.

Key findings

• The average unsecured personal loan balance is $9,896.
• There's a total of $177.9 billion in unsecured personal loan balances, a record high.
• The 60-day delinquency rate on personal loans is 3.25%, which is slightly below pre-pandemic levels.
• Personal loan interest rates are near all-time lows, with an average rate of 9.41% for a 24-month personal loan from a commercial bank.
• Rising loan originations from consumers with lower credit scores are driving the growth of personal loans.
• Oklahoma has the lowest average personal loan balance ($3,355) but also the highest 60-day delinquency rate (6.74%).
• Finance companies are becoming more popular, as they went from having the smallest to the second-largest share of the personal loan market in the last year.

Average personal loan debt in 2022

The average unsecured personal loan balance is $9,896, according to TransUnion. When borrowers take out new loans, the average amount is $6,656.

That's the highest average balance in recent memory, and it's likely due to a spike in borrowing in 2021 and early 2022. Most notably, new loan balances jumped by over 36% (from $5,213 to $7,129) from the first to the second quarter of 2021.

The average loan balance is notably higher than the average credit card debt in 2021 ($5,525), but the total amount owed on credit cards is much higher.

The overall personal loan debt in the United States had decreased in 2021, but it set a new record in the first quarter of 2022. There were $177.9 billion in total unsecured personal loan balances, an 11.7% increase from pre-pandemic numbers in 2020.

Personal loan delinquency rates

Personal loan delinquency rates have gone up over the last year. From the second quarter of 2021 to the first quarter of 2022, the percentage of borrowers with an account 60 days or more past due increased from 2.28% to 3.25%. It's still below pre-pandemic levels, but that could change if it keeps rising.

Average personal loan interest rates

The average interest rate on a 24-month personal loan from a commercial bank was 9.41% as of February 2022.

Interest rates have been trending lower for years, and that has continued during the pandemic. In November 2021, the average interest rate was 9.09%, the lowest in the 50 years that the Federal Reserve Bank of St. Louis has on record.

While the average personal loan interest rate is low, it can vary quite a bit depending on your credit history. The best rates are generally reserved for consumers with a credit score of 720 or higher. If you're not there yet and you need a loan, consider taking some steps to increase your credit score first. (Improving your score will also make you more likely to get approved for credit cards and other financial products.)

Rates also depend on the lender. That's why we always recommend consumers rate shop and see which lender offers them the best deal.

COMPARE OPTIONS: Best Personal Loans

It's also worth noting that so-called payday loans often have extremely high interest rates and should be avoided whenever possible.

Personal loans by credit score

Consumers with lower credit scores have taken on more personal loan debt in the last year. TransUnion measures the portion of outstanding personal loan balances tied to consumers in each credit range. It uses the following ranges in the VantageScore 4.0 system:

• Super prime (781–850)
• Prime plus (721–780)
• Prime (661–720)
• Near prime (601–660)
• Subprime (300–600)

Those with prime credit are responsible for 24.1% of unsecured personal loan debt in the United States, the highest of any group. However, that's less than the percentage a year ago, when they were responsible for 25.8%. From March 2021 to 2022, consumers with subprime and near prime credit took on a greater share of personal loan debt, compared to less for every other group.

Loan amounts are strongly correlated with the borrower's credit score. Consumers with higher credit scores take out larger loans and have greater outstanding balances.

Delinquency rates by credit score

Delinquency rates are much higher for borrowers with lower credit scores, which explains why those scores play such an important role in loan interest rates. Hardly any borrowers in the prime credit score ranges were 60 days or more delinquent on a loan, compared to 13.95% of those in the subprime group.

Personal loan statistics by state

Personal loan balances and delinquency rates vary significantly by state. Interestingly enough, many states with high average balances have low delinquency rates, and vice versa.

Washington, D.C. has an average outstanding balance of $15,364 on personal loans, the highest in the nation. Hawaii has the highest average for a state at $14,439. On the other end of the spectrum, Oklahoma has the lowest average personal loan balance at $3,355.

However, Oklahoma also has the highest percentage of personal loan borrowers that are 60 days or more past due at 6.74%. The state with the lowest percentage is Hawaii, where only 1.09% of borrowers are 60 days or more past due.

Personal loan statistics by type of lender

Options abound for consumers interested in borrowing money. Banks and credit unions are the traditional choices, but there are also fintech companies, as well as finance companies that typically offer loans on specific purchases.

While the first three have seen their portion of loan balances fall over the last year, finance companies have captured a much larger share of the personal loan market.

Delinquency rates by type of lender

Delinquency seems to be a much bigger issue for finance companies. Even though they lend smaller amounts, their rate of past due accounts is over twice that of fintech companies -- and over five times that of banks and credit unions.

Recent trends in personal loans

The biggest trend overall in the personal loan industry is the overall increase in borrowing. Loan originations had plummeted during the pandemic as lenders were reluctant to approve applications. That changed last year, as there were a record 5.73 million loan originations in the fourth quarter of 2021, 9.6% more than pre-pandemic numbers in 2019.

We've also seen a rise in the popularity of buy now, pay later services, as demonstrated by the success of finance companies. For consumers who want to finance a purchase, these lenders tend to be a much more convenient option than a traditional personal loan. And credit cards with a 0% APR promotional period can sometimes take the place of a personal loan without accruing any interest if the borrower completely pays off their balance while in the promotional period.

Probably the best news for consumers is that personal loan interest rates are still low. Whether you're looking at personal loans, purchase financing, or debt consolidation loans, there are plenty of lenders offering competitive rates.

Sources

• Board of Governors of the Federal Reserve System (2022). "Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan."
• TransUnion (2021). "2021 Kicks Off with Consumer Credit Performance Improving and Demand Increasing."
• TransUnion (2021). "Big Gains for All Four Credit Sectors in Q2 2021."
• TransUnion (2021). "Credit Cards Are Surging Thanks to Gen Z."
• TransUnion (2021). "Despite a Series of Challenges, Consumer Credit Health Remains Relatively Strong in Opening Quarter of 2022."
• TransUnion (2022). "Credit Industry Insights Report Q1 2022 Webinar."
• TransUnion (2022). "March 2022 Credit Industry Snapshot."