Personal loans are a growing segment of consumer debt, helping millions of individuals consolidate high-interest credit card balances, finance home improvements, and cover emergency expenses. However, as borrowing reaches record highs, rising interest rates, loan delinquencies, and larger loan balances are shaping the financial landscape in 2025.
This in-depth analysis examines the latest personal loan statistics, trends in the United States and Australia, and what borrowers can expect in the coming year. The data is sourced from TransUnion, Experian, the Federal Reserve, and Money.com.au, ensuring the most accurate and up-to-date insights.
Key Takeaways: Personal Loan Trends in 2025
- Americans owe $249 billion in personal loan debt, marking a 64% increase over the past five years.
- 24.2 million Americans currently have a personal loan, a 4.3% increase year-over-year.
- The average personal loan balance is $11,652, up from $8,758 in 2019.
- Personal loan interest rates have risen to 12.33%, up from 8.73% in 2022.
- The personal loan delinquency rate (60+ days past due) is 3.50%, higher than mortgages (1.22%) and auto loans (1.60%).
- Fintech lenders now control 38% of personal loan balances, up from 5% in 2013.
- 61% of borrowers use personal loans to pay off debt, including 39.2% for debt consolidation and 21.8% for credit card refinancing.
- Personal loan borrowing in Australia has reached an all-time high, with $2.5 billion borrowed monthly in fixed-term loans.
What is a Personal Loan?
A personal loan is an unsecured or secured loan that provides borrowers with a lump sum of money, typically repaid in fixed monthly installments. These loans can be used for debt consolidation, home improvements, medical bills, major purchases, and more.
To learn more about how personal loans work, check out this detailed guide on personal loans.
Total Personal Loan Debt in the United States
How Much Do Americans Owe in Personal Loan Debt?
As of Q3 2024, total outstanding personal loan debt stands at $249 billion, marking the highest level recorded.
| Year | Total Personal Loan Debt |
| 2019 | $152 billion |
| 2020 | $140 billion (Pandemic Decline) |
| 2021 | $162 billion (Rebound Begins) |
| 2022 | $200 billion |
| 2023 | $241 billion |
| 2024 | $249 billion (Record High) |
Why is Personal Loan Debt Growing?
- Debt Consolidation Demand: Many borrowers use personal loans to refinance credit card debt at lower interest rates.
- Fintech Lenders’ Expansion: Online lenders offer fast approval and competitive rates, increasing accessibility.
- Higher Borrowing Limits: Prime borrowers can secure larger loans with longer repayment terms.
Average Personal Loan Balances and Loan Amounts
How Much Does the Average Borrower Owe?
The average personal loan balance per borrower is now $11,652, up from $8,758 in 2019.
| Year | Average Loan Balance |
| 2019 | $8,758 |
| 2020 | $9,387 |
| 2021 | $10,749 |
| 2022 | $11,692 |
| 2023 | $11,652 |
Borrowers are taking on larger loan amounts due to increased credit availability, higher living costs, and rising interest rates.
What is the Average Personal Loan Amount?
- New personal loan borrowers take out an average of $6,700 when opening an account.
- The average new account balance peaked at $8,200 in 2023.
Personal Loan Interest Rates
What Are the Current Interest Rates for Personal Loans?
As of Q3 2024, the average interest rate on a 24-month personal loan is 12.33%, near decade highs.
How Do Interest Rates Vary by Credit Score?
| Credit Score Range | Average APR | Average Loan Amount |
| 720+ (Super Prime) | 10.9% | $16,400 |
| 661-720 (Prime) | 17.6% | $9,200 |
| 601-660 (Near Prime) | 26.6% | $4,200 |
| 300-600 (Subprime) | Varies (Often 100%+) | $1,800 |
To estimate your monthly payments on a personal loan, use this personal loan calculator.
Interest Rate Trends Over Time (2019-2024)
| Year | Average Interest Rate (%) |
| 2019 | 10.25% |
| 2020 | 9.85% |
| 2021 | 9.95% |
| 2022 | 8.73% |
| 2023 | 11.94% |
| 2024 | 12.33% |
Interest rates have increased significantly since 2022 due to the Federal Reserve’s rate hikes, making borrowing more expensive.
Personal Loan Delinquency Rates
Are Americans Struggling to Repay Personal Loans?
The personal loan delinquency rate (60+ days past due) is now 3.50%, down from 4.14% in late 2022.
| Loan Type | Delinquency Rate (Q3 2024) |
| Mortgages | 1.22% |
| Auto Loans | 1.60% |
| Credit Cards (90+ days past due) | 2.43% |
| Personal Loans | 3.50% |
Despite recent improvements, personal loans still have the highest delinquency rates among major consumer loans.
Personal Loan Statistics in Australia
How Much Do Australians Borrow?
Australians borrow $2.5 billion per month in fixed-term personal loans, with an additional $200 million for refinancing.
What Are the Most Common Reasons for Personal Loans in Australia?
| Loan Purpose | Average Loan Amount |
| Investment | $44,814 |
| Vehicle Purchase | $34,827 |
| Home Improvement | $24,333 |
| Debt Consolidation | $22,573 |
| Wedding | $15,811 |
| Holiday | $11,841 |
| Medical | $9,621 |
Personal Loan Borrowing by Age Group
| Age Group | Average Loan Balance ($) |
| 18-24 years | $13,919 |
| 25-34 years | $20,469 |
| 35-44 years | $24,944 |
| 45-54 years | $27,936 |
| 55-64 years | $27,694 |
| 65+ years | $23,306 |
Borrowers aged 45-54 have the highest average loan balance, while younger borrowers (18-24) take on the least.
What to Expect for Personal Loans in 2025
- Interest Rates May Decline Slightly: The Federal Reserve is expected to make further rate cuts in 2025.
- Fintech Lending Will Continue Growing: Fintech lenders now control 38% of personal loans, surpassing banks.
- Debt Consolidation Loans Will Remain Popular: Credit card interest rates are expected to stay above 21%, making personal loans a key tool for refinancing.
Personal Loan Statistics Final Thoughts
For borrowers with strong credit, personal loans remain a cost-effective way to refinance high-interest debt. However, for those with subprime credit, high APRs can create financial strain.
As the personal loan market continues to grow, comparing rates, choosing the right lender, and using loans strategically will be critical for borrowers in 2025.
Sources:
- LendingTree
- USANews
- ChamberofCommerce
- Money.com.au
- Fool
- Finder.com.au
