Personal loans can be used to cover a variety of expenses, offering a useful financial tool when used responsibly. The latest TransUnion data from the first quarter of 2024 shows that 23.5 million Americans owe a total of $245 billion in unsecured personal loans. [1] TransUnion, “Economic Pressures Continue to Drive Growth in the Credit Card and Personal Loan Sectors” https://www.transunion.com/blog/q1-2024-credit-industry-insights-report
But what exactly do people use personal loans for, and do they really make our financial situations better? A survey on behalf of Self asked over 1,000 people about their use of personal loans to find out how we use them. This article also delves into personal loan statistics across the U.S.
In the U.S., 23.5 million people currently have an unsecured personal loan, owing a total of $245 billion to lenders as of Q1 2024.
The number of consumers with personal loans has increased by 5% since 2023, and total unsecured personal loan balances have grown by 9%.
The average personal loan debt per borrower is $11,829, while the average account balance is $8,737.
Millennials and Gen X are the most likely to have used personal loans (86% and 84% respectively), while Baby Boomers use them less (53.9%).
Men use personal loans more often with 89.2% of men borrowing through at least one personal loan compared to 72.9% of women.
The average amount people borrowed with their most recent personal loan is $5,191.
The majority (79.6%) of personal loan users say that using a loan made their financial situation better.
Almost two-thirds (65.6%) of personal loan users say they have missed at least one payment on a loan.
A personal loan is a sum of money you can borrow from a bank, online lender, or credit union, and use to pay for a variety of expenses. Personal loans are a type of installment credit whereby the borrower receives the loan as a lump sum and repays the funds in regular installments over time.
You can use a personal loan for a wide range of expenses, for example, consolidating debt, home improvement projects, emergency expenses, or large purchases.
Unsecured personal loan balances have also increased compared to Q1 of 2023, rising by 9% from a total of $225 billion to $245 billion. In the first quarter of 2021, the total unsecured personal loan balance in the U.S. was $144 billion, indicating a 56.3% increase between 2021 and 2024.
| Q1 2024 | Q1 2023 | Q1 2022 | Q1 2021 | |
|---|---|---|---|---|
| Total Unsecured Personal Loan Balances | $245 billion | $225 billion | $178 billion | $144 billion |
Sources [1] TransUnion, “Economic Pressures Continue to Drive Growth in the Credit Card and Personal Loan Sectors” https://www.transunion.com/blog/q1-2024-credit-industry-insights-report
When breaking down debt individually, the average borrower with a personal loan owes $11,829 as of Q4 2023. The average account balance is $8,737 likely because some borrowers will have more than one personal loan account.
Sources [1] TransUnion, “Economic Pressures Continue to Drive Growth in the Credit Card and Personal Loan Sectors” https://www.transunion.com/blog/q1-2024-credit-industry-insights-report
Data from TransUnion as of March 2024 shows that 23.5 million people in the U.S. currently have a personal loan, which amounts to roughly 9% of the adult population.
According to a survey on behalf of Self, 84% of survey respondents have taken out a personal loan at some point in their life. Of those who have used loans, more than half (58.5%) say they have used personal loans a few times in the past 10 years, while 4.5% say they use personal loans multiple times a year.
| How often people borrow money using personal loans | % of respondents |
|---|---|
| I’ve only used a personal loan once | 21.3% |
| A few times in the last 10 years | 58.5% |
| Once a year | 15.7% |
| Multiple times a year | 4.5% |
Data from TransUnion shows that the number of consumers taking out unsecured personal loans has grown by 5% compared to the first quarter of 2023, and by 24% compared to Q1 2021.
| Q1 2024 | Q1 2023 | Q1 2022 | Q1 2021 | |
|---|---|---|---|---|
| Number of Consumers with Unsecured Personal Loans | 23.5 million | 22.4 million | 20.4 million | 19.0 million |
Source [1] TransUnion, “Economic Pressures Continue to Drive Growth in the Credit Card and Personal Loan Sectors” https://www.transunion.com/blog/q1-2024-credit-industry-insights-report
Men in the survey take out personal loans more often than women with 89.2% of men surveyed saying they have used a personal loan at some point, compared to 72.9% of women.
People aged between 28 and 59 reported using personal loans the most with 85% of people in this age group having used them. 67.7% of younger people (aged 18-27), and 53.9% of older people (over 60) say they have taken out at least one personal loan in their life.
Of those surveyed, the most common amount people had borrowed with their most recent personal loan was $2,501 - $5,000, with 34.5% of people saying they borrowed this much. This was followed by $5,001 - $7,500 (21.7%), and $7,501 - $10,000 (15.4%). Across all respondents, the average amount borrowed with their most recent loan was $5,191.
| Amount borrowed with most recent personal loan | Percentage of respondents |
|---|---|
| Less than $1000 | 8.6% |
| $1,001 - $2,500 | 14.6% |
| $2,501 - $5,000 | 34.5% |
| $5,001 - $7,500 | 21.7% |
| $7,501 - $10,000 | 15.4% |
| More than $10,000 | 5.3% |
Unlike auto loans and mortgages which lend money for specific purchases, a personal loan can be used to pay for more or less any expense. It could be for a new kitchen, a wedding, an unexpected expense like a funeral, or consolidating existing debts into one repayment.
Among survey respondents, the most common expense people use personal loans for is new cars, with 41.1% of personal loan users stating this as a reason for a loan in the past 10 years.
The next most common reason people took out a personal loan was medical bills (35.1%), followed by everyday living expenses (32.3%).
| Reason for personal loan | % of respondents |
|---|---|
| New car | 41.1% |
| Medical bills | 35.1% |
| Living expenses like groceries | 32.3% |
| Car repairs | 28.1% |
| To pay regular bills | 26.6% |
| Vacation | 23.7% |
| Home improvement | 21.7% |
| Consolidating debt | 17.9% |
| Wedding | 15.3% |
| Unexpected or emergency cost | 12.1% |
| Funeral | 11.6% |
| Making a large purchase | 10.8% |
| Moving house | 10.4% |
| Business expenses | 10.3% |
| Divorce expenses | 7.3% |
Data note: Respondents were able to select more than one answer.
79.6% of survey respondents say that using a personal loan improved their financial situation, while 3.3% said it made it worse and 17.1% said it didn’t change anything.
In addition to this, 91.5% of people who have used a loan in the past said they would be happy to use one again.
When breaking down average personal loan balance by state, Washington has the highest average balance as of Q3 2023 at $31,483, up 2.7% compared to Q3 of 2022. Washington DC has the lowest average personal loan balance at $13,507 (an increase of 10.3% YoY), followed by Georgia at $15,708 (up 5.9% YoY).
Wyoming is the only state that saw a drop in average personal loan balances, with a decrease of 0.4% in 2023 compared to 2022.
| State | 2022 | 2023 | Change |
|---|---|---|---|
| State Alabama | 2022 $15,433 | 2023 $16,614 | Change +7.7% |
| State Alaska | 2022 $21,366 | 2023 $22,171 | Change +3.8% |
| State Arizona | 2022 $23,009 | 2023 $24,552 | Change +6.7% |
| State Arkansas | 2022 $21,082 | 2023 $22,558 | Change +7% |
| State California | 2022 $18,896 | 2023 $20,096 | Change +6.4% |
| State Colorado | 2022 $24,538 | 2023 $25,547 | Change +4.1% |
| State Connecticut | 2022 $15,412 | 2023 $16,645 | Change +8% |
| State Delaware | 2022 $18,291 | 2023 $18,660 | Change +2% |
| State Florida | 2022 $20,111 | 2023 $21,468 | Change +6.7% |
| State Georgia | 2022 $14,838 | 2023 $15,708 | Change +5.9% |
| State Hawaii | 2022 $15,056 | 2023 $16,495 | Change +9.6% |
| State Idaho | 2022 $25,392 | 2023 $27,342 | Change +7.7% |
| State Illinois | 2022 $15,321 | 2023 $16,304 | Change +6.4% |
| State Indiana | 2022 $17,408 | 2023 $18,005 | Change +3.4% |
| State Iowa | 2022 $19,644 | 2023 $19,811 | Change +0.8% |
| State Kansas | 2022 $19,789 | 2023 $20,852 | Change +5.4% |
| State Kentucky | 2022 $17,299 | 2023 $18,380 | Change +6.2% |
| State Louisiana | 2022 $18,374 | 2023 $19,243 | Change +4.7% |
| State Maine | 2022 $18,468 | 2023 $18,603 | Change +0.7% |
| State Maryland | 2022 $16,312 | 2023 $17,317 | Change +6.2% |
| State Massachusetts | 2022 $15,725 | 2023 $16,465 | Change +4.7% |
| State Michigan | 2022 $17,027 | 2023 $17,636 | Change +3.6% |
| State Minnesota | 2022 $20,259 | 2023 $21,129 | Change +4.3% |
| State Mississippi | 2022 $16,045 | 2023 $17,440 | Change +8.7% |
| State Missouri | 2022 $18,142 | 2023 $19,619 | Change +8.1% |
| State Montana | 2022 $26,934 | 2023 $28,070 | Change +4.2% |
| State Nebraska | 2022 $20,111 | 2023 $20,417 | Change +1.5% |
| State Nevada | 2022 $21,277 | 2023 $22,438 | Change +5.5% |
| State New Hampshire | 2022 $18,703 | 2023 $19,854 | Change +6.2% |
| State New Jersey | 2022 $15,272 | 2023 $16,276 | Change +6.6% |
| State New Mexico | 2022 $19,776 | 2023 $20,807 | Change +5.2% |
| State New York | 2022 $14,890 | 2023 $15,925 | Change +7% |
| State North Carolina | 2022 $17,141 | 2023 $18,572 | Change +8.3% |
| State North Dakota | 2022 $27,856 | 2023 $27,989 | Change +0.5% |
| State Ohio | 2022 $16,299 | 2023 $16,924 | Change +3.8% |
| State Oklahoma | 2022 $18,669 | 2023 $19,704 | Change +5.5% |
| State Oregon | 2022 $29,247 | 2023 $29,736 | Change +1.7% |
| State Pennsylvania | 2022 $16,145 | 2023 $17,009 | Change +5.3% |
| State Rhode Island | 2022 $15,192 | 2023 $16,395 | Change +7.9% |
| State South Carolina | 2022 $17,253 | 2023 $18,581 | Change +7.7% |
| State South Dakota | 2022 $26,742 | 2023 $28,010 | Change +4.7% |
| State Tennessee | 2022 $17,788 | 2023 $19,323 | Change +8.6% |
| State Texas | 2022 $17,779 | 2023 $19,567 | Change +10.1% |
| State Utah | 2022 $21,086 | 2023 $21,565 | Change +2.3% |
| State Vermont | 2022 $18,529 | 2023 $19,375 | Change +4.6% |
| State Virginia | 2022 $16,765 | 2023 $17,576 | Change +4.8% |
| State Washington | 2022 $30,648 | 2023 $31,483 | Change +2.7% |
| State Washington DC | 2022 $12,250 | 2023 $13,507 | Change +10.3% |
| State West Virginia | 2022 $18,559 | 2023 $19,285 | Change +3.9% |
| State Wisconsin | 2022 $19,039 | 2023 $19,751 | Change +3.7% |
| State Wyoming | 2022 $27,428 | 2023 $27,309 | Change -0.4% |
Sources [2] Experian, “Average Personal Loan Balance Grows 6.3% in 2023” https://www.experian.com/blogs/ask-experian/research/personal-loan-study/
Data from Q3 of each year
Two-thirds (65.6%) of borrowers surveyed say they have missed at least one payment on a personal loan.
According to the TransUnion, the borrower-level 60+ DPD delinquency rate on consumer loans is 3.75% as of Q1 2024. This is up compared to 3.91% in Q1 2023 and compared to 2.68% in Q1 2022. [1] TransUnion, “Economic Pressures Continue to Drive Growth in the Credit Card and Personal Loan Sectors” https://www.transunion.com/blog/q1-2024-credit-industry-insights-report
Of the respondents who said they had never used a personal loan, the majority (55.4%) said they would not consider borrowing money through this method if they needed money.
Although 57.2% said they had never needed to take out a loan, 65.7% said that high interest rates would put them off using one, while 53.6% said they were worried about getting into debt with a loan.
| Reason people haven’t used personal loans | % of respondents |
|---|---|
| High interest rates | 65.7% |
| I’ve never needed one | 57.2% |
| Worried about getting into debt | 53.6% |
| I have borrowed money from other sources | 48.8% |
| Feeling stigma or shame about taking out a loan | 26.5% |
Data note: Respondents were able to select more than one answer.
As of Q1 2024, data from TransUnion shows that the average APR for personal loans is 19.8%, an increase compared to 17.9% in Q1 2023.
Sources [3] TransUnion, “TransUnion Unsecured Personal Lending Industry Insights Report” https://www.transunion.com/content/dam/transunion/global/business/documents/fs2024/ciir-consumer-lending-report.pdf?utm_campaign=PR+Q4+2023+CIIR+&utm_content=report&utm_medium=press-release&utm_source=press-release&utm_term=PR+Q4+2023+CIIR+. Data is based on Q1 of each year and is calculated based on payment frequency, loan amount, and the due amount, not accounting for fees. The APR figures are rounded.
Approval for personal loans depends on a number of factors that represent your ability to pay back the loan. To increase your chances of getting approved, you’ll need a good credit score, a stable income, and a low debt-to-income ratio. Some lenders may have a minimum credit score to approve you for a personal loan. [4] Experian, “6 Personal Loan Requirements to Know Before You Apply” https://www.experian.com/blogs/ask-experian/personal-loan-requirements/
The amount of money you can borrow through a personal loan also depends on your credit score and debt-to-income ratio. Typically, loan amounts can vary from $500 to as much as $100,000. Some banks and other lenders may have a cap of $20,000 for personal loans, while others will offer a lot more to borrowers with exceptional credit scores. [5] Forbes, “What Amount of Money Can You Get With a Personal Loan?” https://www.forbes.com/advisor/personal-loans/how-much-personal-loan-can-i-get
You can use a personal loan for a wide variety of expenses, but there may be some things that you may not be able to use a loan to pay for. These could include:
Sources [6] Credible, “What You Can’t Use a Personal Loan For” https://www.credible.com/personal-loan/what-cant-you-use-a-personal-loan-for
A survey was carried out on behalf of Self in July 2024 which asked 1,038 adults about their use of personal loans.
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