Average Personal Loan Balance Grows 1.7% in 2025

Nationwide, Personal Loan Balances Increase Slightly in 2025

Last year, the average personal loan balance in the U.S. was $19,333, only slightly higher—1.7%—than 2024's average balance of $19,014. This generally tracks the trajectory of other loan balance types in 2025, which mostly grew at a slower rate versus prior years. However, balances are increasing again after a small decline in 2024, when demand for personal loans dropped slightly.

Source: Experian data from September of each year

Meanwhile, the total number of personal loan accounts and balances continues to swell. As 2025 came to a close, consumers owed nearly $600 billion in secured loans. Comparatively, that's a little less than half of the collective credit card balance consumers owe.

Source: Experian, September of each year

As consumers continue to experience price shocks, particularly among higher-cost items like insurance premiums and auto repairs, more are using personal loans to weather the disruption. They're taking out loans to finance large expenses directly or to give themselves more financial maneuverability after an expense is incurred.

While the average balance itself won't tell you this, Experian recently observed a significant increase in the number of personal loan inquiries over the past year. Nationwide, personal loan hard inquiries—credit checks by lenders as part of the application process—were 16% higher in 2025 than they were in 2024.

Hard Inquiries in 2025 vs. Prior Year, Personal Loans and Credit Cards

Again, we may be seeing an occurrence of more consumers voting with their budgets. Few consumers today with an established credit history are particularly excited by a credit card offer with an APR topping 20%, no matter how flexible repayment terms are. Personal loans offer an increasingly popular way to access financing to cover a new purchase or consolidate existing debt at a lower interest rate.

Percentage of US Consumers With Personal Loans Keeps Rising

In 2025, nearly as many consumers have a personal loan (38%) as have a mortgage (41.5%). That's up more than 7 percentage points since 2017, and marks the most drastic change in adoption among the debt products included in our analysis.

Percentage of Consumers With Popular Debt Types

But while most other loan types finance a particular purchase, or in the case of credit cards, a type of purchase, personal loans play more of a cleanup role for many borrowers.

According to Experian surveys, consumers often use personal loans to refinance existing credit card (and other) debt into one fixed monthly payment, often at a lower annual percentage rate (APR) than they were paying previously.

Question: For which of the following reasons might you use a personal loan?

In the case of major purchases and emergencies, a fixed-rate, fixed-term loan is often preferable to variable-rate credit card debt that may take years to pay off if a borrower isn't making aggressive repayments on it.

Learn more: Personal Loan Use Reaches New High; Rate Cuts May Drive More Activity

Credit Scores of Personal Loan Borrowers Are Lower Than the US Average

The average FICO^® Score^Θ of a personal loan borrower was 684 in September 2025, according to Experian data. That's considerably lower than the 713 average FICO^® Score in the U.S. Personal loan borrowers also have higher average credit card balances: $9,165 versus $6,768 for all consumers.

Because they're also repaying a personal loan, their monthly payment costs tend to be higher as well. Personal loan borrowers need to keep up with $1,709 of monthly payments in 2026 on average, versus $1,256 for all consumers.

Personal loan borrowers are most likely to be middle-aged consumers. The percentage of consumers with at least one personal loan was 46.5% for members of Generation X in September 2025, followed closely by 45% for millennials. Other generations use personal loans less than the 38% all-consumer average.

Source: Experian data as of September 2025; ages as of 2025

The States of Personal Loans

Among the states, average balances are a mixed bag. In 11 states, average personal loan balances are lower than they were a year prior in September 2024. In six other states, average balances leapt more than 5% in a year.

Looking at the states where balances are declining, most nonetheless still carry average balances that exceed the nationwide average of $19,333. This suggests that in these areas, consumers may have hit some limits around how much personal loan debt they can comfortably afford.

States Where Personal Loan Balances Declined

Source: Experian, September of each year

At the other end, states where personal loan balances are growing significantly—more than 5% over the past year—had more room to maneuver. (Except for New Hampshire, their average 2024 balances were lower than the national average.) So in these cases, more consumers may have been recently incentivized to refinance some of their debts into a better rate.

Source: Experian data as of September of each year

There may be other causes contributing to regional and local level increases and decreases as well. For instance, many Maryland consumers are either adjacent to or may work or have worked in the public sector, and as a consequence are experiencing more economic disruption (such as a need for emergency expenses) than other consumers. Home insurance premium shocks—home insurance is primarily regulated at the state level in the U.S.—might also create a sudden demand for funds in certain states as well.

Average Personal Loan Balance by State, 2025

At the state level, it's unavoidable to have one's gaze drift to states in the North and Pacific Northwest, where the larger personal loan balances are clearly situated. Some of the explanation may lie in the rurality of these states. It's likely that a larger percentage of loans in these states are secured personal loans—heavy equipment isn't cheap—resulting in higher average balances. (Most personal loans are for sums up to $50,000 as of early 2026.)

Similarly, some states, such as Illinois and New York, have stricter consumer finance laws than other states. Interest rate caps on loans in these and other states restrict lenders from lending at very high rates. As a consequence, consumers in these states are shielded from riskier, expensive loans.

Outlook for Personal Loans in 2026

As Experian detailed in a recent report, demand for personal loans has grown throughout 2025 and shows no signs of stopping in 2026—for both the reasons already noted earlier, as well as other impacts on loan demand. For instance, despite all the economic noise rippling through the business pages, recent surveys of loan officers suggest that banks aren't tightening their lending terms.

Credit Remains a Key Factor in Application Approval

Demand for all types of credit is increasing, according to recent survey data collected by the Federal Reserve Bank of New York. But as is often the case, one's chances of being approved for credit increases with better credit scores.

Credit Application Outcomes, by Credit Score

Hesitation is also a concern for many consumers with lower scores, as most discouraged consumers tend to have lower credit scores than others. Nonetheless, most consumers who do apply for credit are more likely to be approved than rejected.

Fed Likely to Take Conservative Stance on Rate Cuts in 2026

Until recently, economists expected the Federal Reserve to make two interest rate cuts in the key federal funds rate in 2026. Those interest rate cuts usually find their way to borrowers in the form of lower borrowing rates—which may entice otherwise indifferent would-be borrowers.

But recent geopolitical events, among other factors that may be reigniting inflation, appear to have swayed some Fed committee members at their latest policy meeting, with more expecting that only one rate cut may be made. Additional economic turmoil that raises prices for fuel for an extended period could mean rate cuts are off the table entirely.

Insurance Premiums Are the Silent Stressors in Consumer Finances

No matter what you've been insuring these past few years—your car, your home or your health—insurance premiums have only increased, sometimes markedly.

So when annual premiums for any of these coverages increase, it can add an expense of thousands of dollars—a certainty that's been observed in auto, home and health care costs among individual consumers. Even if one's increases are more modest, if they're a self-employed consumer with a mortgage, for example, even typical increases in carrying all three policies will spike most household finances. It also makes it easier to understand why millennials and Gen X are overrepresented in personal loan demand.