How Many People Have Personal Loans? An In-Depth Look at Personal Loan Statistics

Personal loans are becoming more popular. People take out personal loans for many reasons, like debt consolidation, big purchases, or emergency expenses. But, how many people actually have personal loans? Here, we dive into the latest stats, trends, and insights on personal loans to help you understand the current landscape.

What Is a Personal Loan?

A personal loan is a type of loan where people borrow a set amount of money from a lender. This amount is typically repaid with interest in monthly installments over a set period. Unlike some other loans, personal loans are unsecured, meaning they don’t require collateral. This makes them attractive to many people.

How Many People Have Personal Loans?

So, how many people have personal loans today? According to recent studies, around 22 million Americans currently hold personal loans. This number continues to grow as personal loans become easier to access online and through banks, credit unions, and digital lending platforms.

Why Do People Take Out Personal Loans?

There are many reasons why people take out personal loans. Some of the most common include:

1. Debt Consolidation: Many people use personal loans to consolidate high-interest debt.
2. Major Purchases: Some borrowers take out loans for big-ticket items, like furniture or appliances.
3. Home Improvements: Personal loans are often used for home renovations or repairs.
4. Emergency Expenses: When unexpected expenses arise, personal loans can be a quick solution.

By understanding these reasons, it’s easier to see why so many people are choosing personal loans.

Who Qualifies for a Personal Loan?

Not everyone qualifies for a personal loan. Lenders consider several factors, like credit score, income, and debt-to-income ratio. In general, people with a higher credit score have a better chance of getting approved for a personal loan with a lower interest rate.

However, even people with lower credit scores can often find lenders willing to give them a loan, though at higher interest rates. This has led to an increase in the number of people with personal loans.

How Many People Have Personal Loans for Debt Consolidation?

Debt consolidation is one of the top reasons people apply for personal loans. In fact, recent surveys show that nearly 39% of people with personal loans use them for consolidating debt. By paying off high-interest debts, like credit cards, with a lower-interest personal loan, people can save money over time.

How Many People Have Personal Loans for Emergencies?

Emergencies happen. Whether it’s a medical bill, car repair, or another unexpected expense, people need quick access to cash. About 16% of personal loan holders report using their loan funds for emergencies. Personal loans can offer a faster solution compared to other lending options, which is why they are popular for this purpose.

How Many Millennials Have Personal Loans?

Millennials are one of the most active age groups taking out personal loans. Around 36% of personal loan borrowers are millennials. Many millennials use personal loans for reasons like starting a business, paying off student debt, or covering wedding costs. This trend highlights how personal loans are reshaping financial habits for young adults.

How Many People Have Personal Loans for Home Improvement?

Home improvement is another major reason for personal loans. Roughly 19% of people with personal loans use the funds to improve their homes. Personal loans can be a more affordable option than credit cards, especially for big projects like kitchen remodeling or adding a deck.

Are More People Getting Personal Loans?

Yes, personal loans are on the rise. Over the past five years, the number of people with personal loans has increased by nearly 40%. This growth is partly due to the convenience of applying for loans online, as well as the competitive rates offered by online lenders. More people now consider personal loans as a viable financial tool.

What Is the Average Amount People Borrow with Personal Loans?

The average personal loan amount varies by purpose and borrower profile. However, on average, people borrow between $8,000 and $15,000 through personal loans. For large expenses, personal loans often provide better terms than credit cards, making them an attractive option for many.

How Many People Have Personal Loans Compared to Other Types of Loans?

While personal loans are popular, they are still less common than other loans like mortgages or auto loans. Currently, about 10% of the U.S. adult population has a personal loan. In contrast, approximately 44% of Americans have a mortgage, and 30% have auto loans. However, personal loans are growing in popularity faster than most other types of consumer debt.

What Are the Risks of Having a Personal Loan?

While personal loans offer flexibility, they also carry risks. High-interest rates, especially for people with lower credit scores, can lead to a debt spiral if payments aren’t managed carefully. Additionally, defaulting on a personal loan can hurt one’s credit score. Understanding the risks can help people make better choices about taking out personal loans.

How Many People Have Personal Loans Online?

The rise of online lending platforms has made it easier for people to get personal loans. It’s estimated that over half of all personal loans are now originated online. This trend allows borrowers to compare rates, terms, and fees more easily. Many people appreciate the convenience of online personal loans, which explains why they are so popular.

What Is the Future of Personal Loans?

With technology making it easier to access credit, the number of people with personal loans is likely to keep growing. Financial technology (fintech) companies continue to innovate, creating more tailored loan products that meet people’s specific needs.

Conclusion

So, how many people have personal loans? The number is in the millions and continues to rise each year. As more people become aware of the flexibility and benefits of personal loans, this trend is likely to continue. While personal loans aren’t for everyone, they can be a helpful tool for people who need access to funds for various life expenses.