An Overview of Personal Loans in the U.S.

Finance and Economics Discussion Series

Federal Reserve Board, Washington, D.C.

ISSN 1936-2854 (Print)

ISSN 2767-3898 (Online)

Jessica N. Flagg, Simona M. Hannon

2023-057

Please cite this paper as:

Flagg, Jessica N., and Simona M. Hannon (2023). “An Overview of Personal Loans in the

U.S.,” Finance and Economics Discussion Series 2023-057. Washington: Board of Governors

of the Federal Reserve System, https://doi.org/10.17016/FEDS.2023.057.

NOTE: Staﬀ working papers in the Finance and Economics Discussion Series (FEDS) are preliminary

materials circulated to stimulate discussion and critical comment. The analysis and conclusions set forth

are those of the authors and do not indicate concurrence by other members of the research staﬀ or the

Board of Governors. References in publications to the Finance and Economics Discussion Series (other than

acknowledgement) should be cleared with the author(s) to protect the tentative character of these papers.

An Overview of Personal Loans in the U.S.

Jessica N. Flagg

‡

Federal Reserve Board

Simona M. Hannon

Federal Reserve Board

August 29, 2023

Abstract

Personal loans used for a variety of purposes, such as debt consolidation, medical bills, vaca-

tions, or the payment of a large ticket item, reached $356 billion or about 10 percent of non-

revolving consumer credit at the end of 2022. Although depository institutions such as banks,

thrifts, and credit unions dominate the personal loan market, ﬁnance companies, institutions

that typically lend to nonprime consumers, hold nearly a fourth of these loans. This paper pro-

vides an overview of this nascent but relatively understudied sector of the United States credit

market.

Keywords: Consumer Credit, Personal Loans, Installment Loans.

JEL classiﬁcation: G21, G23

We thank Sarena Goodman, Geng Li, and Kamila Sommer for helpful discussions, comments, and suggestions, Anuj

Shahani for generous help with Mintel Comperemedia data, and Shannon Luk for outstanding editing. The views in

this paper are those of the authors and do not necessarily reﬂect those of the Board of Governors of the Federal Reserve

System or its staff.

‡

Address: Board of Governors of the Federal Reserve System, 20th Street and Constitution Ave N.W., Washington,

D.C. 20551, U.S.A. E-mail: jessica.n.ﬂagg@frb.gov.

Address: Board of Governors of the Federal Reserve System, 20th Street and Constitution Ave N.W., Washington,

D.C. 20551, U.S.A. E-mail: simona.m.hannon@frb.gov.

1. Introduction

In the aftermath of the Global Financial Crisis, personal loans returned to prominence as a source

of credit to consumers, partly highlighted by some of the technological advances in the consumer

credit space characteristic of the past decade. While new ﬁnancial technology (FinTech) lenders

entered the market and some even morphed into other types of institutions, traditional lenders

continued to play an important role in providing personal loans to consumers. As the outstanding

balances of these loans have recently started to accelerate, we aim to provide more information on

this understudied sector, employing two relatively new data sources.

As of the end of 2022, personal loans—also known as installment loans or other loans, used

for a variety of purposes, such as debt consolidation, medical bills, vacations, or the payment of a

large ticket item—reached $356 billion or about 10 percent of nonrevolving credit.

From an insti-

tutional perspective, the sector is dominated by depository institutions—that is, banks, thrifts, and

credit unions—and ﬁnance companies, consisting of personal loan companies and sales ﬁnance

companies.

Finally, some payday lenders have recently started to offer installment loans. Our

data allows us to highlight this new trend. Each lender type’s distinct characteristics shape their

underwriting practices, pricing, geographical concentration, and ultimately loan holdings.

Although personal loans can have a variety of characteristics, they can be broadly categorized

into secured—backed by collateral such as jewelry, savings accounts, or ﬁne art—and unsecured

loans. That said, they can also take the form of note loans or promissory notes, which are less

formal agreements usually for small dollar amounts among parties with an existing lending rela-

tionship.

Alternatively, a consumer could also borrow from a ﬁnance company indirectly through

an installment sales contract, an agreement whereby the loan is issued by a retailer and then sub-

sequently purchased by a sales ﬁnance company. Personal loans can have either ﬁxed or variable

interest rates.

In the remainder of this paper, we ﬁrst review the regulatory environment for personal loans

in the United States and then discuss select characteristics of the outstanding balances and the

This estimate is based on the personal loan holdings reﬂected in the Federal Reserve Bank of New York Consumer

Credit Panel (CCP)/Equifax data. It reﬂects loan holdings by traditional lenders such as banks, credit unions, and ﬁnance

companies and does not include estimates of BNPL, payday lender or pawn shop loan holdings, nor those that are not

reported to traditional credit bureaus. (For example, banks also offer to wealthier clients personal loans backed by

securities that are not reported to credit bureaus. In addition, as more recently select payday lenders started to offer

installment loans, some of the more established ones report to alternative credit scoring companies such as Clarity

Services and DataX. None of these loans are reﬂected in the CCP.) The nonrevolving credit estimate is sourced from the

G.19 Consumer Credit release: https://www.federalreserve.gov/releases/g19/current/default.htm.

Personal loan companies provide loans directly to consumers, while sales ﬁnance companies buy installment credit

contracts at a discount from retailers or ﬁnance retail sales. FinTech lenders also hold a notable share of the personal

loan sector, but, given their business models and that some lenders morphed into other types of institutions, their loan

balances are accounted for under other institution type holdings. We will discuss more about FinTech lenders in a

subsequent note.

These loans can be modiﬁed more easily if the parties agree and they have legally binding requirements for the

borrower while not legally binding the lender to legal requirements. At the same time, there are fewer legal remedies

for the lender if the borrower defaults. (Source: https://www.annuity.org/personal-finance/banking/loans/

promissory-note-vs-loan/.)

supply of personal loans, while providing some estimates for the sector based on relatively recent

data sources.

2. Brief Regulatory Overview

The United States consumer credit regulatory environment is dynamic, multilayered, and com-

plex, in particular for nonbank issued personal loans, with states having full ﬂexibility to adopt and

repeal pieces of legislation.

The most important regulatory elements affecting the personal loan

space are interest rate ceilings and banks’ interest rate exportation ability. In addition, over the past

decade, various developments, such as the Madden v. Midland Funding ruling, the Payday Rule,

or the adoption of caps for small loans, also put their marks on the sector.

First, historically, the personal loan sector in the United States has been regulated by the states

through interest rate ceilings. State credit price ceiling laws generally included usury laws and

a variety of special laws allowing higher rates than those allowed under usury laws for speciﬁc

types of credit from certain classes of lenders.

Currently, 15 states have high or no interest rate

ceilings. These are South Carolina, Georgia, Texas, Oklahoma, Louisiana, Tennessee, Missouri,

Illinois, New Mexico, Kentucky, Alabama, Wisconsin, Indiana, Mississippi, and Idaho. In addition

to state interest rate ceilings, credit unions are subject to their own 18 percent ceiling for traditional

personal loans imposed by the National Credit Union Administration. More recently, after 2010,

credit unions are able to make small-dollar short-term loans, labeled payday alternative loans that

can have interest rates of up to 28 percent.

Second, in 1978, the U.S. Supreme Court in Marquette National Bank v. First Omaha Service

Corporation ruled that national banks could charge interest rates permitted by the lending bank’s

home state regardless of the rate permitted by the borrower’s state of residence. Until more re-

cently, this signiﬁcant court ruling had its greatest effect on the credit card market as it enabled

credit card companies to expand their offerings geographically to consumers located across states

with various interest rate ceilings. As a result of the Marquette ruling, credit card companies moved

"For example," notes American Financial Services Association (2016), "in Alabama, traditional installment lenders

are governed by the Small Loan Act, the Consumer Credit Act, and the Interest Usury Statute. In Arkansas, they are

governed by the Arkansas Constitution, the Arkansas Business and Commercial Law Provisions, the Insurance Sales

Consumer Protection Act, the Credit Life and Disability Provisions, and the Uniform Commercial Code. In Georgia,

traditional lenders follow the Usury Statute and the Industrial Loan Act. In Illinois, they follow the Consumer Installment

Loan Act, Consumer Installment Loan Act Regulations, and the Interest Act. The list goes on for each state."

Despite its name the Payday Rule affected the supply of all expensive small loans, irrespective of type.

For example, the 36 percent interest rate cap emerged in the ﬁrst half of the twentieth century in an effort to allow

(as an exception from usury laws) for a legal small dollar consumer loan market, as before its creation, the precursors of

payday lenders, the "salary lenders", were illegally making small loans with four-digit annual interest rates. The Russell

Sage Foundation is credited with the idea behind the 36 percent interest rate cap. The adoption of an interest rate cap of

36 percent at the state and federal level has been dynamic with states adopting it at various points in time and various

pieces of federal legislation imposing it (Saunders, 2013). The Talent Amendment to the 2007 defense authorization

bill was the federal law imposing a novel 36 percent rate cap on payday loans provided to military members and their

immediate relatives (Pew Charitable Trusts, 2012). The adoption of the 36 percent interest rate cap does not outright

prohibit payday lender activity. It makes payday loans unproﬁtable and illegal.

to states with high or no credit card rate ceilings and the credit operations of many large retail stores

and consumer ﬁnance companies were acquired by or otherwise became afﬁliated with national

banks and their subsidiaries. For a while payday lenders also used this "rent a bank" model in

the 1990s and managed to circumvent restrictive state legislation by partnering with banks, until

the legislative loophole was closed for them (Stegman, 2007). Today, specialized ﬁnance compa-

nies and, especially, FinTech lenders partner with banks for the same reason (Bhattacharyya, 2021,

Elliehausen and Hannon, 2023).

Third, other developments also put their mark on the personal loan sector in recent years, but

to a smaller extent. Among them, Second Circuit’s 2015 Madden v. Midland ruling (discussed at

length by Danisewicz and Elard, 2018) restricted FinTech-bank partnership-issued loans in New

York and Connecticut by rendering loans with interest rates above the usury rates in those states

null if sold to non-banks, a key feature of the FinTech-bank partnership model (highlighted by El-

liehausen and Hannon, 2023). The Consumer Financial Protection Bureau’s transient ruling titled

Payday, Vehicle Title, and Certain High-Cost Installment Loans (the Payday Rule) temporarily re-

stricted the availability of expensive personal loans between the time it was proposed, in 2016, and

its revocation, less than three years later.

Finally, more recently Illinois and New Mexico adopted

36 percent caps on small loans.

With the exceptions of the credit union 18 percent interest rate ceiling and of the Payday Rule,

which acted like a "stealth" interest rate ceiling (Calomiris, 2001) and was applicable to high-cost

loans across all states, the aforementioned regulatory restrictions apply locally and thus shape

lenders’ geographical concentration or credit supply. For example, ﬁnance companies restrict their

lending to high or no consumer ﬁnance interest rate ceiling states, while FinTech lenders partner

with banks in order to circumvent low interest rate ceilings and disproportionately target riskier

consumers living in low-rate states (Elliehausen and Hannon, 2023).

3. Personal Loans Outstanding

In order to examine the personal loan outstanding universe, we use a newly-released loan-

level version of the Federal Reserve Bank of New York quarterly Consumer Credit Panel (CCP), a

database on consumers’ credit use and payment performance drawn from anonymized Equifax

credit bureau records.

The sample has coverage of personal loan (or account) holdings issued by

The Payday Rule covered all short-term loans, longer-term balloon-payment loans, and other longer-term loans

with terms of more than 45 days and with APRs in excess of 36 percent in addition to payment mechanisms that allowed

the lender to withdraw payments directly from the consumer’s account. Short-term loans are those with terms of 45 days

or less and include 14-day and 30-day payday loans, vehicle title loans, which are usually made for 30-day terms, and

short-term loans with leveraged payment mechanisms. In addition, the Rule imposed ability to repay requirements, a

set of payment-related rules, and additional requirements meant to protect consumers. The Payday Rule was proposed

on June 2, 2016, ﬁnalized on October 5, 2017, and revoked on February 6, 2019.

The sampling procedure ensures that the same individuals remain in the sample in each quarter and allows for

entry into and exit from the sample, so that the sample is representative of the target population in each quarter. See

Lee and der Klaauw (2010) for a description of the design and content of the CCP. See also https://www.newyorkfed.

org/medialibrary/interactives/householdcredit/data/pdf/data_dictionary_HHDC.pdf.

ﬁnance companies and depository institutions—banks, thrifts, and credit unions—and reﬂects up

to four accounts (or loans) per individual.

Our sample contains industry code indicators that allow us to categorize the personal loan

holdings by sector—ﬁnance companies, banks, thrifts, and credit unions. In addition, a new in-

dicator has been recently added to allow the identiﬁcation of personal loans issued by FinTech

lenders. Moreover, these indicators can be used to further differentiate the ﬁnance company hold-

ings by ﬁnance company type: personal loan companies, sales ﬁnance companies, and a miscella-

neous company category, thus offering a unique perspective into the usually opaque ﬁnance com-

pany universe.

Furthermore, our data include narrative codes that enable the grouping of hold-

ings by product type: secured and unsecured. The latter also includes "other" loans, a category

that primarily consists of note loans, lines or credit, and installment sales contracts among others.

Importantly, the narrative codes enable us to remove charge card accounts and closed accounts

from our estimates, which is not possible using the individual-level CCP data. This is paramount

because the charge card balances are quite notable.

Although the CCP data do not contain in-

terest rate information, the tradeline data set that we are using contains narrative codes indicating

whether the interest rate on a certain loan is ﬁxed.

As personal loans tend to have lower incidence than other loan types, to ensure proper cover-

age, we use a 10 percent random sample from the total available 5 percent sample, covering the

period between 2010:Q1 and 2022:Q4. As of the end of the fourth quarter of 2022, the consumer

ﬁnance CCP loan-level sample showed that more than 31 million individuals or about 11 percent

of the entire adult population covered by the CCP had personal loans.

The personal loan sector

reached $356 billion and consisted of 36.2 million accounts. The median personal loan account

balance is $4,198 and the median monthly payment is $202. About one-fourth of loan balances are

secured, close to 60 percent are ﬁxed rate, and 40 percent are held by nonprime borrowers (those

with Equifax Risk Scores lower than 720).

Looking at outstanding balances (Table 1, column I), we note that depository institutions dom-

inate the personal loan market, holding of 77 percent of balances or $273.6 billion, with banks and

thrifts covering 49 percent of the market and credit unions covering 28 percent. The remainder

market share, of 23 percent or $82.5 billion, belongs to ﬁnance companies. Although personal loan

companies—those providing loans directly to consumers—dominate the ﬁnance company sector,

our data allows us to highlight the presence of sales ﬁnance companies, those buying installment

credit contracts at a discount from retailers or ﬁnancing retail sales, and reveals the existence of

growing number of miscellaneous ﬁnance company balances issued by lenders not traditionally

Although we inquired about the company types included in the miscellaneous category, in order to preserve data

conﬁdentiality, no further details could be made publicly available by Equifax.

All calculations exclude charge card accounts and balances, debt owned, and number of accounts held by deceased

borrowers, those debts and accounts that have been charged off, and closed accounts with zero balances, the majority

of which were likely subject to CFPB’s National Consumer Assistance Plan.

As of 2022:Q4, the CCP covered 282 million individuals, 237 million with credit scores.

Figure 1. Personal Loans Outstanding

100

200

300

400

2010 2012 2014 2016 2018 2020 2022

Banks

Thrifts

Credit Unions

Personal Loan Companies

Sales Finance Companies

Miscellaneous Companies

Dollars (Billions, Real)

4XDUWHUO\

Note: This ﬁgure shows the total personal loans outstanding by sector.

Source: Federal Reserve Bank of New York Consumer Credit Panel (CCP)/Equifax.

classiﬁed as ﬁnance companies, but that offer personal loans.

FinTech lender balances currently

stand at $49.9 billion or 14 percent of the market. As FinTech loans are typically offered in partner-

ship with banks, depending on the moment in the life cycle of the transaction captured in the credit

bureau data, FinTech balances can be reported across the traditional sectors discussed previously.

We will dedicate a subsequent note to FinTech lending.

Looking at the number of outstanding personal loan accounts (Table 1, column II), we note

that depository institutions and ﬁnance companies hold about the same number of accounts—

about 18 million. Taken together with the depository institutions’ much larger balance holdings,

this points to the larger balances on accounts held by depository institutions versus those held

by ﬁnance companies and larger monthly payments (Table 1, columns V and VI).

Indeed, the

median account balance for depository institutions is $6,299 with a median monthly payment of

$251, while, in contrast, the median account balance for a ﬁnance company account is $2,864 with

a monthly payment of $163. FinTech lenders hold 7.7 million accounts, with a median account

balance of $4,256 and a median monthly payment of $197.

Next, when examining the personal loan sector through the borrowers credit risk proﬁles lens

(Table 1, column III), we note the inﬂuence of institutional characteristics. In line with their known

risk aversion, depository institutions primarily offer personal loans to higher credit score borrow-

ers, while, in contrast, ﬁnance companies stay true to their position as a traditional source of credit

for riskier borrowers. The median depository institution borrower risk score is 727, while the me-

As subsidiaries that ﬁnance retail purchases from the parent company, captive auto ﬁnance companies, not covered

in this study, have a function similar to that of sales ﬁnance companies, but for auto purchases.

As of 2022:Q4, the median loan maturity is four years for loans issued by depository institutions, three years for

sales ﬁnance- and miscellaneous company-issued loans, and two years for those issued by personal loan companies.

dian borrower risk score for a ﬁnance company account holder is 626. Among depository insti-

tutions, banks are most risk averse, evidenced by their borrowers having the highest median risk

score—741. In contrast, among ﬁnance companies, the largest credit providers—personal loan

companies have the lowest median risk score—610. As FinTech lenders typically focus on near-

prime and low-prime borrowers, the median borrower risk score is 670, somewhere in between

that for ﬁnance company borrowers and depository institution borrowers.

Looking at the borrowers’ ages reﬂected in the CCP data (Table 1, column IV), we ﬁnd differ-

ences in account holdings reﬂecting the business practices of each lender. For example, we ﬁnd

that depository institutions tend to lend to slightly older and more established borrowers. The me-

dian age of a borrower taking a personal loan from a depository institution is 48, two years older

than that of a ﬁnance company borrower. Moreover, within the ﬁnance company sector, we ﬁnd

that the sales ﬁnance company borrower median age is notably lower than that of a personal loan

company borrower. This may be a reﬂection of the nature of goods ﬁnanced by sales ﬁnance com-

panies, such as appliances, acquisitions more consistent with younger borrower habits. In con-

trast, personal loan company accounts are less likely to be held by younger consumers, as older

borrowers are more likely to use personal loans from traditional ﬁnance companies to reﬁnance

debt. The median borrower age on a FinTech-issued personal loan account is 45. Data from the

two largest FinTech lenders—LendingClub and Prosper—show that a stable share of their loan is-

suance, about 70 percent, is for debt consolidation purposes.

Finally, looking at personal loan holdings by product type and borrower risk proﬁle (Table 2),

we note that about one-fourth of total outstanding balances are secured, about 60 percent have

ﬁxed interest rates, and 40 percent are held by nonprime borrowers (those with Equifax Risk Scores

lower than 720).

Although in terms of account holdings, depository institutions and ﬁnance com-

panies tend to hold similar shares of secured, unsecured, and other loans, their holdings of unse-

cured and other loan balances differ. Depository institutions hold more other loan balances, while

ﬁnance companies hold larger unsecured loan balances. Moreover, we note differences in ﬁxed

rate loan holdings, with depository institutions holding larger shares of ﬁxed rate loans and bal-

ances in comparison to ﬁnance companies (about 65 percent relative to a little over 40 percent).

Exposures to nonprime borrowers also vary by sector, with ﬁnance companies leading the credit

offerings for such borrowers. Nearly all FinTech loans and balances are unsecured and about three-

fourths have ﬁxed rates. More than half of FinTech loan balances are loans extended to nonprime

borrowers.

LendingClub’s LoanStats data was available to researchers via https://www.lendingclub.com/ until December

2017.

The nature of the collateral used to secure loans tends to vary by lender type. Banks usually offer secured loans

collateralized by savings accounts or certiﬁcate of deposits, while ﬁnance companies use other personal goods to secure

loans.

Table 1: Personal Loan Holdings, by Sector as of 2022:Q4

Lender Type Outstanding Number of Borrower Equifax Borrower Balance per Account Monthly

Balance Accounts Risk Score Age Account Payment

(billion $) (million) (median) (median) (median) (median)

I II III IV V VI

Depository 273.6 18 727 48 6,299 251

Institutions

Banks 172.4 8.9 741 49 8,348 293

Thrifts 2.5 0.1 720 50 5,058 242

Credit Unions 98.7 9 714 47 4,966 221

Finance 82.5 18.2 626 46 2,864 163

Companies

Personal Loan 53.8 12 610 47 2,905 169

Sales Finance 7.7 1.4 632 41 2,861 164

Miscellaneous 21 4.8 654 44 2,713 147

In Total 356.1 36.2 685 47 4,198 202

FinTech* 49.9 7.7 670 45 4,256 197

Note: *Although separately identiﬁed in the table, because of FinTech lenders speciﬁc business models, FinTech

balances are reﬂected across sectors. We will provide details in a subsequent note. As of 2022:Q4, the median loan

maturity is 2.9 years for loans issued by banks, 2.7 years for loans issued by thrifts, 2.6 for loans issued by credit

unions, 1.5 for loans issued by personal loan companies, 2.4 for loans issued by sales ﬁnance companies, and 1.25 for

loans issued by miscellaneous companies. The FinTech median loan maturity is 2.3 years. The median Equifax Risk

Score for the entire covered population is 742, and the median age is 49.

Source: Federal Reserve Bank of New York Consumer Credit Panel (CCP)/Equifax.

Table 2: Personal Loan Holdings by Sector, Product Type, and Risk Shares as of 2022:Q4

Sector Holdings Secured Unsecured Other Fixed Rate Nonprime

(%) (%) (%) (%) (%)

I II III IV V

All

Balance 24 40 36 59 40

Accounts 22 57 21 53 67

Depository

Institutions

Balance 23 34 43 64 29

Accounts 20 57 23 65 49

Finance

Companies

Balance 27 60 13 43 79

Accounts 24 58 18 42 85

FinTech*

Balance 0.3 99 0.7 72 56

Accounts 0.15 97 2.85 75 71

Note: *Although separately identiﬁed in the table, because of FinTech lenders speciﬁc business models, FinTech

balances are reﬂected across sectors. We will provide details in a subsequent note. Nonprime is Equifax credit score

under 720.

Source: Federal Reserve Bank of New York Consumer Credit Panel (CCP)/Equifax.

4. The Supply of Personal Loans

In order to better understand the supply landscape for personal loans, we turn to Mintel Com-

peremedia data (Mintel from now on), a data set consisting of monthly acquisition offers (solicita-

tions) for personal loans. As the solicitations are credit offers, they are a measure of credit supply.

The data represent monthly campaign-level mail volume sent to consumers. Mintel randomly se-

lects roughly 4,000 consumers from a pool of 1 million consumers that Mintel purchased from a

large survey service provider.

The company records all the offer details in its databases, thus of-

fering insights into the rich supply offer landscape.

Finally, Mintel applies weights to about 2,500

consumers participating in the survey to represent the entire U.S. adult population.

Importantly for our analysis of the supply landscape, the data enable us to observe the name

of the company sending the offer and the product type, which, in turn, enables us to categorize the

offers by lender type.

Mintel data estimates show that in 2022 approximately 1.5 billion personal loan acquisition

offers were sent to consumers.

Offers for unsecured loans dominate the personal loan supply,

with only 7 percent of offers being for secured loans. Finance companies and FinTech lenders in

partnership with specialist banks currently dominate the personal loan supply landscape with 34

percent and 33 percent of mail offer solicitations, respectively. The remainder of offers are issued

by banks other that those involved in partnerships (16 percent), FinTech lenders without the partic-

ipation of banks (7 percent), banks that are typically involved in partnerships making independent

offers (6 percent), other ﬁnancial institutions (3 percent), payday lenders making installment loan

offers (2 percent), and credit unions (less than 1 percent).

The 2022 personal loan supply landscape was not much different from that of the past decade.

Looking more closely at the FinTech-bank partnership sector over the past ten years, we observe

the notable participation of the market leaders: WebBank and Cross River Bank, alongside other

participants such as First Bank of Delaware, First Electronic Bank, Farmers Merchant Bank, Mid

America Bank & Trust Company, County Bank of Rehoboth Beach, Republic Bank, The Brand Bank-

ing Company, FinWise Bank, Goldman Sachs Bank USA, First Bank & Trust, and Capital Commu-

nity Bank. When examining the partnership structure, we note the dominance of WebBank (55

Dettling and Hsu (2021) and Han et al. (2018) discuss the use of solicitations as a measure of supply.

The Mintel panel is balanced on four major demographic characteristics: region, age, income, and household size.

Each month, about 2,500 consumers participate in the Mintel survey by mailing back to Mintel offers from across the

sectors monitored by the company. Mintel motivates participation with rafﬂes, offering prizes such as gift cards.

Every month, post collection, the data are sent to TransUnion alongside the name and address of the panelist.

TransUnion, then, appends the VantageScore for every panelist. Mintel conducts an additional survey on participating

consumers to collect household-level demographic and socioeconomic information. This additional information is

merged with the mail offer information. The demographic and socioeconomic information collected by Mintel applies

to the household head and is representative at the household level, while the VantageScore is that of the panelist.

We categorize the lenders programmatically when their name allows us to and manually, with the help of the Google

search engine, otherwise.

According to Mintel, solicitations for personal loans represent the largest mail volume category, superseding that

for mortgage loans or credit cards.

Percentages do not add to 100 because of rounding.

Figure 2. Personal Loan Offer Mail Volume

2010 2012 2014 2016 2018 2020 2022

FinTech-Bank Partnerships

FinTech Companies

Payday Lenders

Specialist Banks

Mainstream Banks

Credit Unions

Other Companies

Finance Companies

Mail Volume (Billions)

Annual

Note: This ﬁgure shows the annual personal loan offer mail volume for each lender category. In 2022, ﬁnance

companies dominated this space. After becoming a bank in February 2021, LendingClub Bank N.A.’s mail

volume solicitation is included in the mainstream bank category.

Source: Mintel Comperemedia.

percent of offerings) and Cross River Bank (36 percent of offerings). The FinTech company pres-

ence in partnership structures is less concentrated than that of partner banks. Before becoming a

bank, LendingClub had the largest share of offerings (37 percent of offerings), closely followed by

Best Egg (25 percent of offerings) and Prosper (18 percent of offerings). Upstart and Upgrade have

much smaller shares of offerings (9 percent and 3 percent of offerings, respectively).

Next, regarding the ﬁnance company sector over the analyzed period, it is important to note the

robustness of the supply of credit provided by this sector over the past decade, which includes the

pandemic years (Figure 2). While the supply of credit from all the other sectors reﬂected in the data

shrank at the onset of the pandemic, the supply of credit from ﬁnance companies remained virtu-

ally unchanged. This could be explained by ﬁnance companies risk-inclined traditional business

model. OneMain/Springleaf leads both the unsecured and secured mail offer solicitation cam-

paign volume, followed by Big Picture Loans and World Finance Corporation.

Also of note, as

mentioned in the previous section, ﬁnance companies concentrate their credit supply in states

that allow them to be proﬁtable. In Figure 3, we show the mail volume concentration over the

period.

Banks, whether traditional or specialist—those typically engaged in partnerships with FinTech

lenders—made about the same number of solicitations over the period. Among them, Discover

Bank is the leader among traditional banks, and Goldman Sachs Bank USA dominates the mail

volume solicitations sent by specialist banks without a FinTech partner.

Springleaf Financial acquired OneMain Financial in November 2015. The surviving brand is OneMain Financial.

OneMain/Springleaf dominates the ﬁnance company mail volume solicitations over the period with 45 percent of ﬁ-

nance solicitations.

Figure 3. Finance Company Mail Volume Solicitations

Note: This ﬁgure shows the share of ﬁnance company mail volume in total mail volume over the period.

High consumer ﬁnance interest rate ceiling states are hatched. Finance companies concentrate their mail

solicitations in states where the regulatory environment allows them to be proﬁtable.

Source: Mintel Comperemedia.

RISE, Payoff Inc., and Social Finance, Inc. lead the mail volume solicitations from FinTech

lenders without a bank partner.

Finally, as our data allows us to observe the participation of payday lenders to the personal

loan space, we note that Check ’n Go is the market leader in terms of payday mail offer solicitation

campaigns for personal loans, with 31 percent of mail volume solicitations. Castle Payday and

Arrowhead Advance each offered about 10 percent of the mail volume solicitations mailed over the

period, followed by Advance America and Cash Store with 8 percent of solicitations each.

5. Conclusion

In this paper, we provided an overview of the personal loan sector in the U.S. by combining

data sources to allow for a deeper look into an otherwise opaque sector. We started by brieﬂy

reviewing the regulatory environment for personal lending, which is governed by state interest

rate ceilings and banks’ ability to export their home state interest rate. We examined the stock

of personal loans with the help of a newly released CCP data set, and we were able to examine

the supply landscape with the help of Mintel data. Our data revealed that, in 2022, there were

approximately 1.5 billion mail acquisition offers sent to borrowers and that 31 million consumers

owed about $356 billion in personal loan debt, representing about 10 percent of total nonrevolving

consumer credit. The average monthly payment on a personal loan is about $202. About one-

fourth of loans are secured, and the majority are ﬁxed rate. Exposures to nonprime holdings are

concentrated within the ﬁnance company sector. In a subsequent note, we will examine in depth

personal loans belonging to the FinTech sector.

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