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An Overview of Personal Loans in the U.S

Author

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  • Jessica N. Flagg
  • Simona Hannon

Abstract

Personal loans used for a variety of purposes, such as debt consolidation, medical bills, vacations, or the payment of a large ticket item, reached $356 billion or about 10 percent of nonrevolving consumer credit at the end of 2022. Although depository institutions such as banks, thrifts, and credit unions dominate the personal loan market, finance companies, institutions that typically lend to nonprime consumers, hold nearly a fourth of these loans. This paper provides an overview of this nascent but relatively understudied sector of the United States credit market.

Suggested Citation

  • Jessica N. Flagg & Simona Hannon, 2023. "An Overview of Personal Loans in the U.S," Finance and Economics Discussion Series 2023-057, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2023-57
    DOI: 10.17016/FEDS.2023.057
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    References listed on IDEAS

    as
    1. Song Han & Benjamin J. Keys & Geng Li, 2018. "Unsecured Credit Supply, Credit Cycles, and Regulation," The Review of Financial Studies, Society for Financial Studies, vol. 31(3), pages 1184-1217.
    2. Lisa J Dettling & Joanne W Hsu, 2021. "Minimum Wages and Consumer Credit: Effects on Access and Borrowing [Price pass-through and the minimum wage]," The Review of Financial Studies, Society for Financial Studies, vol. 34(5), pages 2549-2579.
    3. Donghoon Lee & Wilbert Van der Klaauw, 2010. "An introduction to the FRBNY Consumer Credit Panel," Staff Reports 479, Federal Reserve Bank of New York.
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    Cited by:

    1. Elliehausen, Gregory & Hannon, Simona M., 2024. "FinTech and banks: Strategic partnerships that circumvent state usury laws," Finance Research Letters, Elsevier, vol. 64(C).
    2. Stone, Anna-Leigh, 2024. "Payday alternative loans: PAL or Foe?," Finance Research Letters, Elsevier, vol. 66(C).

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    More about this item

    Keywords

    Consumer credit; Personal loans; Installment loans;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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