Personal Loans Market Outlook - 2030
The global personal loans market size was valued at $47.79 billion in 2020, and is projected to reach $719.31 billion by 2030, growing at a CAGR of 31.7% from 2021 to 2030.
Personal loan is an amount of money borrowed by an individual for a variety of purposes such paying for home renovations, consolidate debt, and wedding. In addition, personal loans are generally offered by banks, credit unions, and online loan providers. Moreover, personal loans typically have lower interest rates than credit cards and can be used to consolidate multiple credit card debts into a single and lower-cost monthly payment.
With low interest rates & higher borrowing limits, personal loans are attracting a greater number of consumers, which is a major driving factor for the market growth. In addition, personal loans with a single & fixed-rate monthly payment is easier to manage than several credit cards with different interest rates, payment due dates, and other variables. These factors contribute toward growth of the personal loans market. However, growing number of bad debts among individuals availing personal loans and higher fees & penalties charged for personal loans are some of the factors that limit the market growth.
On the contrary, developing economies such as India, Malaysia, Bangladesh, China, and South Korea offer significant opportunities for personal loans companies to expand their offerings as huge population of these nations are in a constant need for loans to improve their standard of living, for which consumers hugely depend upon personal loans. Moreover, personal loan firms are rapidly switching toward digitalized business operations, thus, adoption & implementation of technologies such as chatbots, big data analytics, IoT, and artificial intelligence (AI) has increased tremendously, which is anticipated to open new avenues for the market in the coming years.
The report focuses on growth prospects, restraints, and trends of the personal loans market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the market outlook.
Segment Review
The personal loans market is segmented into type, age, marital status, employment status, and region. By type, the market is bifurcated into P2P marketplace lending and balance sheet lending. Depending on age, it is segmented into less than 30, 30-50, and more than 50. Based on marital status, the market is segregated into married, single, and others. By employment status, the market is divided salaried and business. The salaried segment is further segregated into male, female, and others. Region wise, the market is analysed across North America, Europe, Asia-Pacific, and LAMEA.
By Type
P2P Marketplace Lending segment will grow at a highest CAGR of 32.2% during 2021 - 2030.
Competitive Analysis
The personal loans market analysis includes top personal loans companies such as American Express, Avant, LLC, Barclays PLC, DBS Bank Ltd, Goldman Sachs, LendingClub Bank, Prosper Funding LLC, Social Finance, Inc., Truist Financial Corporation, and Wells Fargo. These personal loans companies have adopted various strategies to increase their market penetration and strengthen their position in the personal loans industry.
Top Impacting Factors
Numerous Benefits Provided by Personal Loans
Personal loans have numerous benefits for which it is in huge demands among consumers. It generally does not require collateral to get approved of the loan amount. Furthermore, one major reason for availing personal loans is that it allows to manage several credit cards with different interest rates and payment due dates. Moreover, borrowers that qualify for a personal loan with a lower interest rate than their credit cards are able to streamline their monthly payments and save money for future financial consequences. Therefore, these benefits provided by personal loans are becoming major factors that propels personal loans market opportunity.
High Fees and Penalty Charges
Generally, personal loans engage in fees and penalties that drive up the cost of borrowing. Some loans come with origination fees of 1% to 6% of the loan amount. The fees are either rolled into the loan or subtracted from the amount disbursed to borrowers. Moreover, several lenders charge prepayment penalties if the borrower pays balance before the end of their loan term. Furthermore, consumers ignoring fine print of details including fees and penalties before taking personal loan creates a sense of distrust in the minds of consumers. Therefore, this is a major factor limiting growth of the personal loans market.
Technological Advancements in the Field of Lending
Increase in adoption of advanced technologies such as chatbots, IoT, AI, and big data analytics have led to growth of the personal loans market growth. In addition, with increase in digitalization, personal loans providers are looking forward to quickly invest on client engagement by providing digital and voice-enabled assistants. Moreover, chatbots, which is a software application used to conduct an on-line chat conversation, are largely used by personal loans firms, as it helps in offering more personalized & user-friendly experience to customers.
Furthermore, with the help of advance technology, a greater number of startups are coming up with innovative personal loans schemes, for instance, Zopa is a Person-2-Person platform for personal loans. It enables borrowers to access loans from multiple lenders or investors and provides a credit card for online/offline purchases and a fixed-term savings account. These startups are helping consumers to avail loans at the safety of their homes. Therefore, possibilities of technological advancements are unlimited, which are expected to create remunerative opportunities for the growth of the personal loans market.
By Region
Asia-Pacific would exhibit the highest CAGR of 40.2% during 2021-2030
Report Coverage & Deliverables
The personal loans market report offers a comprehensive analysis of market dynamics, including personal loans policy changes, emerging technologies, and key challenges. It covers various loan types, the role of financial institutions and personal loan companies, and the impact of digital transformation in the personal loans domain. The report includes data on market size, personal loans adoption rates, and competitive strategies of key personal loan companies. Additionally, it addresses personal loan challenge in the market, such as regulatory hurdles, customer acquisition costs, and fraud prevention.
Type Insights
The personal loans market includes several types of loans:
Unsecured Personal Loans: These personal loans are the most common, requiring no collateral and typically offered by banks, credit unions, and online lenders.
Secured Personal Loans: Backed by collateral, these loans generally have lower interest rates but are less common.
Technology Insights
Digital transformation has accelerated personal loans growth, with fintech companies leading the charge in offering innovative personal loans services. Key technologies driving this growth include:
Artificial Intelligence (AI): Enhances loan approval processes through improved credit scoring and risk assessment models.
Mobile Banking & Digital Platforms: Enable seamless loan applications, instant approvals, and quick disbursement, particularly appealing to younger demographics.
Blockchain Technology: While still emerging, blockchain is expected to improve transparency and reduce fraud in the personal loans domain. The integration of AI and digital platforms has significantly increased personal loans adoption, making it easier for borrowers to access quick funding.
Application Insights
Personal loans market are primarily used for: Debt consolidation, home improvements. medical expenses, and large purchases such as cars, weddings, or vacations. The personal loans share is growing, particularly in the debt consolidation space, as consumers look to streamline their finances. Additionally, personal loans market have become popular alternatives to credit cards due to lower interest rates and flexible repayment terms.
Regional Insights
North America holds the largest personal loan value, driven by the high adoption of digital lending platforms and the presence of major financial institutions offering competitive personal loans services.
Asia-Pacific is experiencing rapid growth, particularly in India and China, where rising middle-class incomes and digital financial services are driving personal loans adoption.
Key Companies & Market Share Insights
Major players in the personal loans market include:
LendingClub, SoFi, and Marcus by Goldman Sachs are key players in the U.S., dominating the digital lending space through user-friendly personal loans services.
Santander, Barclays, and HSBC are prominent in Europe, offering a range of personal loans services tailored to local consumer needs.
In Asia-Pacific, Ant Financial and WeBank are key players, leveraging technology to provide personal loans to the underbanked population. The market share of these companies is influenced by their ability to innovate, manage regulatory challenges, and maintain competitive interest rates.
Key Benefits for Stakeholders
- The study provides in-depth analysis of the global personal loans market share along with current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, and opportunities and their impact analysis on the global personal loans market size are provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the personal loans market.
- An extensive analysis of the key segments of the industry helps to understand the personal loans market trends.
- The quantitative analysis of the global personal loans market forecast from 2021 to 2030 is provided to determine the market potential.
Personal Loans Market Report Highlights
| Aspects | Details |
 By Type |
|
 By AGE |
|
 By MARITAL STATUS |
|
 By EMPLOYMENT STATUS |
|
 By Region |
|
 Key Market Players | GOLDMAN SACHS, WELLS FARGO, TRUIST FINANCIAL CORPORATION, AVANT, LLC, PROSPER FUNDING LLC, LENDINGCLUB BANK, AMERICAN EXPRESS, BARCLAYS PLC, DBS BANK LTD, SOCIAL FINANCE, INC. |
Analyst Review
With increase in demand for personal loans, in terms of unique goals & short-term fluctuating needs, consumers increasingly turned to personal loans, making this type of financing one of the fastest-growing forms of debt. Moreover, firms are aiming at enhancing immediate focus toward seamless client communications and adopting digital tools for fulfilling consumers constant needs toward personal loans. Firms in the personal loans sector are increasingly expanding their offerings to other financial services such as banks & credit agencies to meet changing consumer needs.
During the COVID-19 health crisis, credit scores among personal loan holders have disrupted and lenders began to tighten their loan qualification requirements. In addition, several lenders made widespread changes to their credit and risk appetite, and restricting the supply of credit. These factors have resulted into massive decline in personal loans during the pandemic situation.
The personal loans market is fragmented with the presence of regional vendors such as American Express, Goldman Sachs, and Barclays PLC. Some of the key players profiled in the personal loans market report include Avant, LLC, DBS Bank Ltd, LendingClub Bank, Prosper Funding LLC, Social Finance, Inc., Truist Financial Corporation, and Wells Fargo. Major players operating in this market have witnessed significant adoption of strategies that include business expansion and partnership to reduce supply and demand gap. With increase in awareness & demand for personal loans across the globe, major players are collaborating their product portfolio to provide differentiated and innovative products.
The Personal Loans Market is estimated to grow at a CAGR of 31.7% from 2021 to 2030.
The Personal Loans Market is projected to reach $719.31 billion by 2030.
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Factors such as With low interest rates & higher borrowing limits, personal loans are attracting a greater number of consumers drives the growth of the Personal Loans market
The key players profiled in the report include American Security Products Co., Access Security Products Ltd., Alpha Safe & Vault, Inc., Acme Security Systems, BJARSTAL, Bode-Panzer GmbH, Diebold Nixdorf Incorporated, Dormakaba, Gunnebo Industries AB, and Godrej & Boyce Manufacturing Co. Limited, and many more.
On the basis of top growing big corporations, we select top 10 players.
The Personal Loans Market is segmented on the basis of type, age, marital status, employment status, and region.
The key growth strategies of Personal Loans market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.
By employment status, the Personal Loans market is divided salaried and business
P2P Marketplace Lending segment will grow at a highest CAGR of 32.2% during 2021 - 2030.
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