Personal Loans 2023: Average Rates and Balances This Year

Personal loans do not require collateral, hence, the possible higher interest rates. In this article, read and find out what are the average rates and balances for personal loans 2023!

Personal loans are not secured but can be borrowed to be used for different purposes. These loans often come with competitive interest rates and prolonged repayment terms. This means that these loans allow borrowers to consolidate debt, accomplish home renovations, and pursue several financial goals.

According to Backman, however, personal loans do not require collateral. This means that they may possibly come with higher interest rates compared to secured alternatives. Reportedly, as of the last quarter of 2022, more than 22.5 million borrowers have unsecured personal loans with an average debt of $11,116 each.

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Statistics of Personal Loans 2023

According to Treece, as of the last quarter of 2022, unsecured personal loans have reached a new record of $222 billion. These loans are dominated by below-prime borrowers, with an annual growth of 38.7% for near-prime borrowers and 60.4% for subprime. Furthermore, reports say 22.5 million borrowers have at least one unsecured personal loan which is a 12.9% increase from 2022.

By the beginning of 2023, the balances for unsecured personal loans have reportedly increased by 32%. A survey by Forbes Advisor revealed that 68% of Americans have applied for these loans in the past year. In addition, 27% of these borrowers use these loans to pay for monthly expenses, 23% for debt consolidation, and 20% for home renovations.

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