Personal Loans Market Report 2025

The personal loans market size has grown rapidly in recent years. It will grow from $774.58 billion in 2024 to $855.13 billion in 2025 at a compound annual growth rate (CAGR) of 10.4%. The growth in the historic period can be attributed to economic stability, low interest rates, rising consumer confidence, debt consolidation trends, marketing and advertising.

The personal loans market size is expected to see rapid growth in the next few years. It will grow to $1.27 trillion in 2029 at a compound annual growth rate (CAGR) of 10.6%. The growth in the forecast period can be attributed to emergence of fintech lenders, rise in educational expenses, pandemic recovery borrowing, focus on financial inclusion, gig economy and self-employment. Major trends in the forecast period include digitalization of lending, use of alternative data for credit scoring, personalized loan products, rise of peer-to-peer (P2P) lending, financial inclusion initiatives.

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.

Low interest rates are anticipated to drive the growth of the personal loan market in the future. Interest rates represent the amount a lender charges a borrower for the use of borrowed funds. When interest rates are lower, personal loans become more appealing to consumers, resulting in increased demand for these loans. Personal loans with reduced interest rates are frequently viewed as a cost-effective alternative to credit cards, as they allow consumers to finance various expenses at a lower overall cost. For example, in 2023, the International Monetary Fund, a US-based international financial institution, projected that global inflation would rise from 4.7 percent in 2021 to 8.8 percent in 2022. Consequently, low interest rates are fueling the growth 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 focusing on strategic partnerships to improve service reliability. A strategic partnership entails collaboration between two or more organizations to achieve shared objectives. For example, in August 2024, L&T Finance Ltd., a financial services company based in India, collaborated with CRED, an Indian fintech company, to offer unsecured personal loans. Users can access these loans through CRED's exclusive members-only platform. This partnership aims to provide swift access to loans with flexible repayment options and competitive interest rates, specifically targeting individuals with high credit scores. The collaboration marks a strategic move into digital lending, enhancing customer experience while navigating the regulatory framework of unsecured credit in India. Leaders from both companies have expressed confidence in setting new standards in the co-lending sector, ultimately promoting a cycle of responsible borrowing and lending.

In February 2023, Lendingkart, a non-banking financial company (NBFC) based in India, acquired Upwards for about $12 million. This acquisition seeks to strengthen Lendingkart's offerings in the personal loan sector, with a particular emphasis on underserved segments such as blue-collar workers and microentrepreneurs. Upwards is a fintech company based in India that provides personal loans to salaried professionals.

Major companies operating in the personal loans market include Wells Fargo & Company, Marcus by Goldman Sachs, 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, 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 2024. 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.

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 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 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.

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