Average Personal Loan Amount: Loan Options, Limits, and Trends

The average personal loan amount can vary significantly depending on the lender and the borrower's creditworthiness. Typically, personal loans can range from $1,000 to $50,000 or more.

Some lenders specialize in smaller loan amounts, often between $1,000 to $5,000, which can be used for unexpected expenses or small projects. These loans usually have shorter repayment periods.

Borrowers with excellent credit may be eligible for larger loan amounts, up to $100,000 or more. However, these loans often come with stricter repayment terms and higher interest rates.

Typically, personal loans are repaid over a period of 3 to 7 years.

The average personal loan amount can vary significantly depending on several factors.

According to a recent report, the average borrower with a personal loan owes $11,829 as of Q4 2023.

The amount borrowed for debt consolidation is also worth noting. Almost half (47%) of debt consolidators borrowed between $10,000 and $20,000, while 32% borrowed over $20,000.

In terms of the most common amount people had borrowed with their most recent personal loan, 34.5% of people said they borrowed between $2,501 and $5,000.

The average amount borrowed with the most recent loan was $5,191. Here's a breakdown of the amounts borrowed by respondents:

The average balance of unsecured personal loans in the United States was $11,687 in the second quarter of 2024, according to TransUnion.

Loan options and limits can be a bit tricky to navigate. Lenders consider a combination of factors to determine how much you can borrow with a personal loan.

Your credit score is a crucial factor, with a score of at least 670 often preferred by lenders. A high credit score shows you've managed debt well in the past, making you a more attractive borrower.

The amount of current debts you have can also impact your borrowing capabilities. A high amount of outstanding debt may lower the loan amount you're offered. This is because lenders consider your debt-to-income ratio, which compares your monthly debt payments to your gross monthly income.

Lenders may also take into account your income level, employment history, and the purpose of the loan. A higher income and stable employment history can lead to higher borrowing limits, while a history of unemployment or frequent job changes may lead to a lower loan amount.

Here's a rough idea of the loan amount ranges you can expect:

Before accepting any loan amount, consider what payments you can afford to avoid overborrowing.

Personal loans are just one of the many forms of consumer debt available to us. They account for a relatively small percentage of total consumer debt, coming in at a mere 0.9% according to Federal Reserve and LendingTree data.

Mortgage debt, on the other hand, makes up a whopping 72.8% of total consumer debt, far surpassing personal loans. This is because mortgages are often used for large purchases like homes, which can't be paid off in a short period.

Credit cards, while not as widely used as mortgages, still hold the second smallest share of consumer debt at 7.2%. They offer the flexibility to take on as much or as little debt as you want, making them ideal for small purchases.

Personal loans, however, are better suited for larger purchases that will take over a year to pay off. This is because they often come with fixed interest rates and repayment terms, making it easier to budget and plan.

Almost half of debt consolidators borrowed between $10,000 and $20,000 for debt consolidation, with 32% borrowing over $20,000. This suggests that personal loans are often used for significant debt consolidation.

Lenders consider a combination of factors to determine how much you can borrow with a personal loan. Your credit score is a significant factor, with lenders preferring a score of at least 670.

Your current debts, including credit card balances and mortgages, also impact the loan amount you're offered.

A higher income often leads to higher borrowing limits as lenders feel confident you can meet the monthly payments.

The amount you can borrow with a personal loan can range from $500 to $50,000, depending on the lender and your loan application.

Some banks and financial institutions cap borrowing amounts at around $20,000, while others offer loans up to $100,000 to borrowers with exceptional credit.

The average amount borrowed with a personal loan is $5,191, according to recent surveys.

Here's a breakdown of the most common amounts people borrow with their most recent personal loan:

Overall, the amount you can borrow with a personal loan depends on various factors, including your credit score, income, and debt-to-income ratio.

If you're looking to get a loan, you can consider options from banks, credit unions, and online lenders. Many banks offer personal loans with varying interest rates and repayment terms.

Credit unions often have more flexible loan requirements and may offer lower interest rates. Some credit unions also offer loans with no fees or origination charges.

Online lenders provide a range of loan options, including payday loans, installment loans, and lines of credit. These lenders often have faster application and approval processes.

Some online lenders may also offer loans with soft credit checks, which won't affect your credit score. However, be cautious of lenders that charge high interest rates or fees.

Loan statistics and trends are revealing some interesting insights about personal loans in the US. The number of consumers with personal loans has grown by 5% since 2023, and total unsecured personal loan balances have grown by 9%.

Millennials and Gen X are the most likely to have used personal loans, with 86% and 84% respectively having borrowed through at least one personal loan. Men also use personal loans more often, with 89.2% of men borrowing compared to 72.9% of women.

Here are some key statistics on personal loans:

Debt consolidation costs can be a significant concern for those looking to simplify their finances.

The average debt consolidation loan amount is substantial, with 47% of borrowers taking out between $10,000 and $20,000.

Personal loan lenders may charge a sign-up, or origination, fee, but most don't charge any fees other than interest.

Balance transfer credit cards come with fees between 2% and 5%, unless you qualify for a no-fee balance transfer card.

The Wells Fargo Active Cash Card charges a fee that equals 3% of your balance for 120 days from account opening, then up to 5% ($5 minimum).

Qualifying for a balance transfer credit card requires excellent credit, whereas personal loan options are available for people with fair credit and good credit.

The number of personal loan users has grown by 5% YoY, with 23.5 million consumers taking out unsecured personal loans in Q1 2024. This is a significant increase from Q1 2023, when 22.4 million consumers took out such loans.

The growth in personal loan users can be attributed to the rise of Fintechs, which have made loans more accessible than ever before. Consumers can now complete the whole application process in minutes from behind a laptop or phone screen, a far cry from the traditional process of visiting a bank or credit union.

The data from TransUnion shows a steady increase in the number of consumers taking out unsecured personal loans over the past few years.

This growth is a testament to the convenience and accessibility of Fintechs, which have become consumers' preferred means of acquiring personal loans. By Q4 2018, FinTech loans accounted for 38% of outstanding loan balances, compared to a mere 5% five years prior.

The average personal loan balance varies significantly from state to state. Washington state has the highest average balance at $31,483, a 2.7% increase from 2022.

If you're considering taking out a personal loan, it's essential to know the average balance in your state. Wyoming is the only state that saw a drop in average personal loan balances, with a decrease of 0.4% in 2023 compared to 2022.

Some states have seen significant increases in average personal loan balances. For example, Texas saw a 10.1% increase, and North Carolina saw an 8.3% increase.

Here's a breakdown of the top 5 states with the highest average personal loan balances:

These numbers can give you an idea of the average debt burden in each state. It's also worth noting that some states have seen significant increases in serious borrower delinquency, with a slight increase from 2.06% in 2023 to 2.26% in 2024.

Personal loan delinquency rates have seen some improvement over the years, with a 1.4% decrease from 2009 to 2019, reaching a rate of 3.39% in Q4 2019.

This rate is still higher than the others, with auto loans at 1.44% and mortgages at 1.45% in the same period.

The marked increase in personal loan amounts hasn't led to a corresponding increase in delinquency rates, which have remained steady in the 3-4% range over the past few years.

Interest rates for personal loans have been on the rise. As of Q1 2024, the average APR for personal loans is 19.8%, which is an increase from 17.9% in Q1 2023.

This increase is notable, and it's essential to consider it when taking out a personal loan. The average APR for personal loans can significantly impact the total amount you'll pay over the life of the loan.

The Federal Reserve's actions can also influence personal loan rates. Although interest rates aren't directly set by the Fed, federal funds rate increases can lead to personal loan rate increases.

According to the Fed, the national average on a personal loan was 11.92% in Q2 2024. This rate is lower than the Q1 2024 average APR of 19.8%, but it's still a significant amount to consider.

It's crucial to understand that personal loan rates can vary depending on the lender and the borrower's creditworthiness.

Personal loan delinquency rates have been steadily improving over the past decade, with a 1.4% decrease from 4.78% to 3.39% in Q4 2019.

This improvement is notable, especially considering the increasing number of personal loans being taken out.

However, personal loan delinquency rates remain the highest among the main forms of consumer debt, more than doubling the rates of auto loans and mortgages.

At 3.39%, personal loan delinquency rates are more than twice that of auto loans, which have a Q4 2019 rate of 1.44%.

Mortgage delinquency rates are also relatively low, at 1.45% in Q4 2019.