Personal Loans Global Market Report 2024

A personal loan is a financial product available for individuals to borrow from banks, credit unions, or other financial institutions, and it can be utilized for various purposes. Typically, it is an unsecured loan, meaning it lacks collateral such as a house or a car to secure it. Approval for the loan is contingent upon the borrower's creditworthiness, income, and other relevant factors.

The primary types of personal loans include P2P marketplace lending and balance sheet lending. P2P (peer-to-peer) marketplace lending involves a lending model where individuals can directly borrow and lend money through online platforms, circumventing traditional financial institutions. In this model, borrowers connect with individual lenders who provide the necessary funds. Personal loans are typically categorized into long-term loans (more than 4 years), medium-term loans (2 to 4 years), and short-term loans (less than 2 years). These loans are commonly sought for purposes such as debt consolidation, home improvement, education, and other financial needs. Personal loan applicants come from diverse backgrounds, including employed individuals, professionals, students, entrepreneurs, and others.

The personal loans market research report is one of a series of new reports from The Business Research Company that provides personal loans market statistics, including personal loans industry global market size, regional shares, competitors with a personal loans market share, detailed personal loans market segments, market trends, and opportunities, and any further data you may need to thrive in the personal loans industry. These personal loans market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The personal loans market size has grown rapidly in recent years. It will grow from $703.37 billion in 2023 to $776.98 billion in 2024 at a compound annual growth rate (CAGR) of 10.5%. The growth observed in the historical period can be attributed to economic stability, low interest rates, increasing consumer confidence, trends in debt consolidation, and the impact of marketing and advertising efforts.

The personal loans market size is expected to see rapid growth in the next few years. It will grow to $1178.65 billion in 2028 at a compound annual growth rate (CAGR) of 11.0%. The anticipated growth in the forecast period can be attributed to the emergence of fintech lenders, the rise in educational expenses, borrowing for pandemic recovery, a focus on financial inclusion, and the growth of the gig economy and self-employment. Major trends in the forecast period include the digitalization of lending, the use of alternative data for credit scoring, the development of personalized loan products, the rise of peer-to-peer (P2P) lending, and initiatives promoting financial inclusion.

The anticipated expansion of lending channels is poised to propel the personal loans market's growth in the future. The heightened demand for lending channels signifies a heightened inclination and necessity for diverse avenues enabling individuals and businesses to secure loans or credit. The proliferation of online lending platforms and fintech firms has intensified the desire for personal loan lending channels. Personal loans offer individuals the flexibility to access funds for various personal requirements without the need for collateral, facilitating the financing of expenses, debt consolidation, or addressing unforeseen financial challenges. Consequently, the surge in demand for lending channels is a key driver of the burgeoning personal loans market. Notably, in August 2022, as reported by TransUnion in its Q2 2022 Credit Industry Insights Report (CIIR), the total personal loan balances reached a record $192 billion, marking a substantial 31% increase from the previous year. This underlines the significant impact of the escalating demand for lending channels on the growth trajectory of the personal loans market.

The anticipated growth of the personal loan market is expected to be propelled by low interest rates in the foreseeable future. Interest rates, representing the charges levied by lenders on borrowers for utilizing borrowed funds, play a pivotal role in shaping consumer behavior. The prospect of lower interest rates enhances the attractiveness of personal loans to consumers, resulting in an upswing in demand for such financial products. Personal loans featuring reduced interest rates are often perceived as a cost-effective alternative to credit cards, providing consumers with a means to finance various expenses at a more favorable cost. As an illustration, in 2023, the International Monetary Fund reported a forecasted global inflation rate, indicating an increase from 4.7 percent in 2021 to 8.8 percent in 2022 but a subsequent decline to 6.5 percent in 2023. Consequently, the prevailing low interest rates are a significant driver fueling the expansion of the personal loan market.

Prominent players in the personal loans market frequently prioritize technological advancements to maintain a competitive edge, exemplified by Amplifi Capital, a UK-based fintech firm. In September 2022, the company introduced the Reevo Money brand, specializing in personal loans. This brand distinguishes itself by offering instantaneous loan quotes and more favorable Annual Percentage Rates (APRs) compared to traditional lenders. Leveraging cloud-based infrastructure and open banking, Reevo Money targets consumers with suboptimal credit histories or irregular income, aiming to cater to unconventional borrowers and those not meeting conventional criteria.

Major players in the personal loan market are increasingly emphasizing strategic partnerships as a key approach to delivering reliable services to their customers. These partnerships involve collaborative arrangements between two or more companies, aiming to mutually support and achieve their respective objectives. A noteworthy example occurred in March 2021 when Apple Bank, a New York-based financial institution providing consumer deposit accounts, personal loans, and business banking services, entered into a strategic partnership with Upstart, a US-based consumer lending company. This collaboration resulted in the launch of Personal Loans, Apple Bank's digital unsecured personal loan product. Through this strategic alliance, Apple Bank has expanded its offerings to include unsecured consumer loans within the Upstart marketplace, enhancing its ability to meet the diverse needs of clients and the local New York community. The partnership facilitates a seamless online application process, allowing consumers to conveniently and efficiently apply for personal loans. With a streamlined online application and administration system, Apple Bank's personal loans are designed to provide consumers with an easy and expeditious means of obtaining funds for various purposes.

In August 2021, Latitude Financial Group Limited, an Australia-based financial services company, successfully acquired Symple for an estimated $200 million. This strategic acquisition is part of Latitude's initiative to broaden its footprint and enhance capabilities within the personal loan market. Symple, a financial technology (fintech) company based in Australia, specializes in providing personal loans to individuals. The integration of Symple into Latitude's portfolio aligns with the company's strategic vision to strengthen its position in the financial services sector and cater to the evolving needs of consumers in the personal loan segment.

Major companies operating in the personal loans market report are Wells Fargo & Company, Marcus by Goldman Sachs, American Express Company, 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, EarnIn, Upgrade, Universal Credit, United Services Automobile Association, PNC Financial Services Group Inc, Toronto-Dominion Bank

North America was the largest region in the personal loans market in 2023. 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.

The countries covered in the personal loans market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The personal loans market includes revenues earned by entities by providing unsecured personal loans and secured personal loans. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

Personal Loans Global Market Report 2024 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.

This report focuses on personal loans market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.

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Where is the largest and fastest growing market for personal loans ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The personal loans market global report from the Business Research Company answers all these questions and many more.

The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

• The market characteristics section of the report defines and explains the market.
• The market size section gives the market size ($b) covering both the historic growth of the market, and forecasting its development.
• The forecasts are made after considering the major factors currently impacting the market. These include:

The impact of sanctions, supply chain disruptions, and altered demand for goods and services due to the Russian Ukraine war, impacting various macro-economic factors and parameters in the Eastern European region and its subsequent effect on global markets.

The impact of higher inflation in many countries and the resulting spike in interest rates.

The continued but declining impact of covid 19 on supply chains and consumption patterns.

• Market segmentations break down the market into sub markets.
• The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth. It covers the growth trajectory of COVID-19 for all regions, key developed countries and major emerging markets.
• The competitive landscape chapter gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
• The trends and strategies section analyses the shape of the market as it emerges from the crisis and suggests how companies can grow as the market recovers.

Scope

Markets Covered:

• 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
• Companies Mentioned: Wells Fargo & Company; Marcus by Goldman Sachs; American Express Company; The Goldman Sachs Group Inc.; Barclays PLC
• Countries: Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Russia; South Korea; UK; USA; Canada; Italy; Spain
• Regions: Asia-Pacific; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
• Time series: Five years historic and ten years forecast.
• Data: Ratios of market size and growth to related markets, GDP proportions, expenditure per capita,
• Data segmentations: country and regional historic and forecast data, market share of competitors, market segments.
• Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.
• Delivery format: PDF, Word and Excel Data Dashboard.