Personal loans were growing in popularity in 2019, but borrowing slowed in 2020. CNBC Select takes a look at Experian personal loan data.
From CNBC: Personal loans were the fastest-growing debt category in 2019, but new data from Experian found that changed in 2020. While personal loans saw a 12% year-over-year increase in 2019, the category only grew 1% in 2020 (the slowest for any debt category last year) with fewer people taking out loans.
Delinquencies also saw a dramatic decrease, with 27% fewer accounts past due 30 days or more. On average, personal loan balances sat at $16,458 in the third quarter of 2020.
Nearly one-quarter (22%) of U.S. adults have a personal loan, according to the credit bureau. Baby boomers led the pack in 2019 with the largest personal loan balances on average ($19,253 in Q2).
Online marketplaces like Upstart have made it easier to apply and qualify for flexible loan options, and online lenders such as LightStream and Discover Personal Loans provide alternative ways to finance big expenses like weddings and home improvements.
Here are the top reasons why people take out personal loans, using data from a 2019 Experian survey:
- Large purchases: 28% of respondents
- Debt consolidation: 26% of respondents
- Home improvements: 17% of respondents
- Debt refinancing: 9% of respondents
- Another reason (not listed): 30% of respondents
The average FICO® Score for someone with a personal loan in 2020 was 689, which is considered a good credit score.
Read the full story at CNBC: https://www.cnbc.com/select/2020-experian-personal-loan-data/
