More Americans are taking out personal loans than ever before. From paying down credit card debt to covering a car repair or an unexpected bill, personal loans have become a practical option for a lot of households managing the cost of everyday life.
So where does the market stand right now? We’ve rounded up the latest figures on how many people are borrowing, how much, what they’re paying, and what they’re using the money for heading into 2026.
Key Personal Loan Statistics
- 25.9 million Americans had an unsecured personal loan in 2025
- Over a quarter of Americans are spending more than they earn
- New personal loans rose by 24% in 2025 compared to the year before
- The average outstanding personal loan balance per borrower is $11,724
- The average new personal loan amount is $7,000
- The most common reason Americans took out a personal loan in 2025 was to cover everyday bills
- The average personal loan rate fell to 11.14% by mid-2025, down from 12.32% at the end of 2024
- The borrower delinquency rate (60+ days past due) was 3.52% in 2025, lower than it was in 2022
- Americans owe roughly five times more in credit card debt than in personal loan debt
- Personal loan rates for 2026 are forecast at around 12% APR for a borrower with a 700 credit score
Why did Americans take out personal loans in 2025?
People borrow for all kinds of reasons, and the data from 2025 reflects just how much financial pressure many households are under. With 26% of Americans living beyond their means, i.e. spending more than they earn, many have to turn to other sources of income to help keep them afloat.
While debt consolidation remains one of the most common motivations, a lot of borrowers use personal loans to cover costs we all deal with regularly.
Here are the top five reasons Americans took out personal loans in 2025:
5. Rent
Average apartment rent in the US sat at around $1,740 per month in late 2025, and roughly half of all renter households were already spending more than 30% of their income on housing. When rent takes up that much of a paycheck, there’s very little room for anything else. It’s not hard to see why some renters turned to a personal loan just to keep up.
4. Groceries and Food
Food prices in the US rose by around 3.1% over 2025, outpacing overall inflation and continuing a run that has left grocery costs nearly 30% higher than they were before the pandemic. When weekly groceries cost more than they did a few years ago, and wages haven’t kept up with inflation, it puts real pressure on household budgets. For some Americans, a personal loan has become a way to bridge that gap while they find their footing.
3. Unexpected Expenses
Unexpected costs, like a medical bill, a broken appliance, a home repair that couldn’t wait, are one of the most common reasons people look for fast, flexible borrowing options – with 41% of Americans saying they could cover a $1,000 emergency expense from savings. That means the majority would need to borrow, cut spending elsewhere, or find another workaround to cover an unplanned expense, which makes personal loans a go-to option for many people.
2. Car-Related Expenses
According to AAA’s 2025 driving cost analysis, the average cost of owning and operating a new car in the US has reached about $11,577 per year, which works out to around $965 per month when you factor in insurance, maintenance, and finance costs.
When routine car ownership already costs that much, an unexpected car repair on top of it can easily tip a household budget over the edge. For many Americans, a personal loan became the most practical way to keep their car on the road.
1. Bills
Everyday bills topped the list as the number one reason Americans took out personal loans in 2025. According to doxo’s 2026 US Household Bill Pay Report, the typical household now faces median monthly bills of $3,289, or $39,468 a year. That figure accounts for roughly 47% of median household income, covering essentials like mortgage payments ($1,769), rent ($1,453), utilities, insurance, and telecom.
With costs like electricity and health insurance rising more than 7% year over year, even a modest spike in one area can be enough to tip a household budget into the red and push families toward a personal loan.
How many Americans have personal loan debt in 2025?
25.9 million Americans had an unsecured personal loan in Q3 2025, up from 24.2 million the year before.
According to TransUnion, new personal loans rose by 24% in the third quarter of 2025 compared to the same period in 2024, with much of that growth coming from borrowers with the lowest credit scores.
That’s an increase of nearly 4 million borrowers in three years, with the pace picking up sharply in 2025.
What is the average personal loan debt per borrower in 2025?
The average personal loan balance per borrower reached $11,724 in Q3 2025, the highest level in the past three years.
After a slight dip between 2023 and 2024, average balances have edged back up in 2025. The overall trend since 2022 shows a nearly $1,000 increase per borrower, which aligns with broader cost-of-living increases over the same period.
Personal Loan Delinquency Rates 2025
Delinquency happens when a borrower falls 60 or more days behind on their loan payments, and it’s one of the clearest indicators of financial stress in the market.
Delinquency rates have actually improved since their 2022 peak, dropping from 3.89% to 3.50% in Q3 2024 before ticking up very slightly to 3.52% in Q3 2025. That marginal rise is worth watching, particularly given the 24% increase in new loans opened in the same period.
More borrowers entering the market, especially those with lower credit scores, can put upward pressure on delinquency rates over time. For now, the figures remain well below where they were three years ago.
What is the average personal loan amount taken out by Americans in 2025?
When borrowers open a new personal loan, the average starting balance is $7,000. That’s different from the average outstanding balance of $11,724, which reflects what borrowers owe across all active loans, including those that have been running for some time.
What is the average personal loan interest rate in the US?
Personal loan rates have shifted over the past few years, largely in response to Federal Reserve rate decisions. According to Federal Reserve data for commercial banks, the average Annual Percentage Rate (APR) on a 24-month personal loan has moved:
Rates climbed steeply between 2021 and 2023 as the Fed raised interest rates to tackle inflation, peaking above 12% before gradually softening. By mid-2025, the average had eased to 11.14%, though it edged back up slightly in Q3.
For context, market forecasts for 2026 suggest that a borrower with a credit score of around 700 taking out a $5,000 loan over three years could expect a rate of roughly 12% APR. Your actual rate will depend on your credit score, the lender, and the loan amount and term you choose.
Do Americans prefer using credit cards or personal loans for their debt?
Total credit card debt in the US currently is around $1.28 trillion, compared to roughly $269 billion in personal loan debt. That means Americans owe around 5 times more on credit cards than on personal loans.
Part of that comes down to how credit cards are used. They’re woven into everyday spending – groceries, gas, bills, subscriptions – and the revolving nature of the debt means balances can build up gradually without a single borrowing decision being made. Personal loans are usually taken out for a specific purpose and a specific amount.
What the data doesn’t capture is how many Americans are carrying credit card balances at higher interest rates than they’d pay on a personal loan. Many people continue to revolve card debt out of habit, convenience, or simply not knowing that consolidating into a personal loan could lower their monthly interest costs. For borrowers in that position, a personal loan is worth looking at.
Predictions for the Personal Loan Market in 2026
- Borrower numbers will keep rising. With 25.9 million Americans already holding unsecured personal loans and new originations up 24% in Q3 2025, the market shows no signs of slowing down. Demand is expected to grow further in 2026, particularly among lower-credit borrowers who have fewer alternative options.
- Interest rates should ease slightly. The downward trend seen through 2025 is expected to continue into 2026. Forecasts place average personal loan rates at around 12% APR for a borrower with a 700 credit score, though this will vary depending on lender, loan size, and term.
- Debt consolidation will remain the top loan purpose. With credit card balances staying high and interest rates on cards still well above personal loan rates for many borrowers, debt consolidation loans are likely to remain one of the most common reasons people take out personal loans.
- Cost-of-living pressures will sustain demand. Bills, rent, groceries, and car costs are all still elevated. Until household budgets get meaningful relief, personal loans will continue to fill the gap for people managing financial shortfalls.
- Lenders will focus more on lower-credit borrowers. Much of the 2025 growth came from borrowers at the lower end of the credit spectrum. Expect more lenders to develop products aimed at this segment, though borrowers in this category should compare rates carefully before committing.