An Overview of Personal Loans in the U.S.

Personal 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 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 provides an overview of this nascent but relatively understudied sector of the United States credit market.