WalletHub’s quarterly personal loan landscape reports track interest rates, fees, loan amounts and more across credit segments in order to help people better understand the nuances of the personal loan market.
The personal loan landscape is important to analyze for two reasons. First, being able to see the bigger picture – averages, trends, etc. – gives you a baseline against which to compare offers. That in turn will help you find the best personal loan deals and ultimately save more money, since personal loan offers change regularly based on the health of the economy as well as lenders’ business objectives. Second, monitoring the personal loan landscape can tell you a lot about the health of the U.S. consumer, particularly their borrowing needs and qualifications.
You can check out our latest findings below.
Main Personal Loans Industry Trends
APR
- The overall average Personal Loans APR increased from 16.00% in 2019 Q4 to 17.84% in 2020 Q3.
- APR generally increases with lower credit standing of applicants. On average, an applicant with excellent credit gets offered a 64% less APR than an applicant with bad credit history.
Origination Fees
- The average Origination Fees went from $191 in 2019 Q3 to $167 in 2020 Q3.
- Origination Fees differ by purpose of loans and consumers’ credit score. On average, an applicant with excellent credit is charged 90% less origination fee than an applicant with bad credit history.
Qualified Credit Scores
- The average credit scores that received an Personal Loans offer went from 717 in 2019 Q3 to 708 in 2020 Q3.
- Applicants with purpose of debt consolidation receive offers with lowest average credit scores.
Purpose of Loans
- Debt consolidation is the main player in the personal loan market with more than 50% market share.
- Lenders are more willing to accept debt consolidation loans.
Credit Standings
Distribution of Approval Rates by Credit Standings
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent Credit | 48.93% | 56.58% | 66.94% | 64.01% | -13.52% |
| Good Credit | 40.02% | 36.21% | 56.02% | 46.02% | 10.52% |
| Fair Credit | 25.00% | 22.09% | 37.43% | 27.72% | 13.17% |
| Bad Credit | 6.57% | 5.04% | 3.32% | 3.30% | 30.36% |
Number of Total data points: 9445, recommended N/A thresholds: <50
Distribution of Approval Rates by Credit Standings
Average Loan Amount by Credit Standing
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent Credit | $10,310 | $11,055 | $11,085 | $9,730 | -6.74% |
| Good Credit | $9,240 | $9,307 | $10,563 | $9,381 | -0.72% |
| Fair Credit | $7,222 | $6,680 | $8,214 | $7,604 | 8.11% |
| Bad Credit | $5,403 | $6,172 | $6,254 | $7,096 | -12.46% |
Number of Total data points: 15965, recommended N/A thresholds: <80
Average Loan Amount by Credit Standing
Average Loan Term by Credit Standing in months
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent Credit | 32 | 33 | 33 | 33 | -3.03% |
| Good Credit | 31 | 30 | 33 | 33 | 3.33% |
| Fair Credit | 29 | 28 | 32 | 32 | 3.57% |
| Bad Credit | 25 | 27 | 30 | 31 | -7.41% |
Number of Total data points: 15965, recommended N/A thresholds: <80
Average Loan Duration by Credit Standing in months
Average Monthly Payment under a $10,000 Loan by Credit Standing
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent Credit | $340 | $333 | $341 | $327 | 2.10% |
| Good Credit | $370 | $374 | $364 | $353 | -1.07% |
| Fair Credit | $429 | $427 | $386 | $387 | 0.47% |
| Bad Credit | $495 | $438 | $438 | $433 | 13.01% |
Number of Total data points: 15965, recommended N/A thresholds: <80
Average Monthly Payment under a $10,000 Loan by Credit Standing
Origination Fee
Average Origination Fee under a $10,000 Loan by Credit Standing
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent Credit | $23 | $16 | $68 | $92 | 43.75% |
| Good Credit | $182 | $202 | $168 | $229 | -9.90% |
| Fair Credit | $369 | $386 | $292 | $383 | -4.40% |
| Bad Credit | $551 | $550 | $441 | $482 | 0.18% |
Number of Total data points: 15965, recommended N/A thresholds: <80
Average Origination Fee under a $10,000 Loan by Credit Standing
Purpose of Loans
Percentage of Personal Loans Applications by Purposes of Loan
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Debt Consolidation | 54.99% | 55.60% | 58.05% | 57.48% | -1.10% |
| Refinance | 6.21% | 6.15% | 4.42% | 4.10% | 0.98% |
| Home Improvement | 9.50% | 8.91% | 7.34% | 7.39% | 6.62% |
| Large Purchase | 13.57% | 14.00% | 12.09% | 12.29% | -3.07% |
| Others | 15.72% | 15.35% | 18.11% | 18.74% | 2.41% |
Number of Total data points: 15958, recommended N/A thresholds: <80
Percentage of Personal Loans Applications by Purposes of Loan
Debt to income ratio
Percentage of Offers by Level of DTI Excluding Mortgage for Excellent Credit Standing
| Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2020 vs. Q2 2020 Change | |
|---|---|---|---|---|---|
| Excellent (<0.08) | 62.59% | 64.54% | 66.03% | 69.26% | -3.03% |
| Good (0.08-0.12) | 16.27% | 16.81% | 14.65% | 16.11% | -3.20% |
| Fair (0.12-0.19) | 21.14% | 18.65% | 19.31% | 14.64% | 13.35% |
| Bad (>0.19) | 13.07% | 11.90% | 15.89% | 12.18% | 9.85% |
Number of Total data points: 5024, recommended N/A thresholds: <50
Percentage of Offers by Level of DTI Excluding Mortgage for Excellent Credit Standing
Methodology
Wallethub’s personal loans landscape report was compiled using data from the personal loans offers and lenders’ responses, monitored by WalletHub. From the list below, you can find all the characteristics of the different segments analyzed in this report.
1. Credit Standings
a) Excellent Credit: credit score greater than 750
b) Good Credit: credit score between 700 and 749
c) Fair Credit: credit score between 640 and 699
d) Bad Credit: credit score less than 640
2. Purposes of Loans
a) Debt Consolidation
b) Refinance
c) Home Improvement
d) Large Purchase
e) Others
3. Debt-to-income Ratio excluding Mortgage
a) Excellent: DTI less than 0.08
b) Good: DTI between 0.08 and 0.12
c) Fair: DTI between 0.12 and 0.19
d) Bad: DTI greater than 0.19