More Americans Than Ever Are Relying on Personal Loans. Here's What You Need to Know

Personal loans are steadily gaining popularity as consumers lean on unsecured borrowing to pay their rising bills. The share of Americans with personal loans reached a new high in 2025, with nearly four in 10 adults now using one, according to Experian data.

"U.S. consumers continue to spend, based on recent retail sales figures, and credit card balances continue to climb," the report said. "At the same time, record-high interest rates on existing credit card balances may be motivating more consumers to search for lower-cost ways to manage that debt."

While not as draining as high-interest rate credit cards, taking on unsecured debt at average rates above 10% usually isn't plan A. But the trend line around personal loans has been consistent: The share of consumers with this type of debt has ticked up each year for almost a decade. The pace of growth has gained steam, too, with the share of Americans with a personal loan increasing by 1 percentage point or more per year since 2021.

The total number of personal loans on credit reports now stands at 67.5 million — up 7% from 2024. Of those loans, 30 million are unsecured, meaning they are not tied to a car or another asset. For that reason, they typically also have higher rates.

A record number of consumers have personal loans: Report

Experian, which connects consumers to personal loan lenders, frames the growth of this business as a sign that more consumers are strategically using personal loan products to "refinance and consolidate higher-interest debt."

And while that may be true, the news is also a warning sign that — whether it's inflation, the job market or something else — consumers are facing tough financial circumstances driving them into potentially costly loans. For borrowers with strong credit, personal loans can carry rates as low as 7% or 8%, as of early 2026. But for other consumers, they can be just as expensive as credit cards, with APRs topping 30%.

The average personal loan balance is $19,333, according to Experian, and the Federal Reserve reports an average rate of 11.65% for a two-year loan. At those levels, a borrower would pay over $180 per month in interest in the first month. A year of payments later, they would still be paying over $100 per month just in interest. (In total, that loan would accrue over $2,400 in interest.) What's more, many borrowers are turning to loans with longer terms, often up to 5 or 7 years, as a way to keep monthly payments low. But longer terms typically carry higher APRs.

Personal loans can sometimes help consumers manage credit card debt that's hurting their credit. And when interest rates drop, personal loans can be an option to pay off higher interest rate debt — essentially trading one debt for another with a lower rate.

Recent interest rate cuts "have clearly accelerated personal loan activity," Rakesh Patel, executive vice president for Experian Consumer Services Marketplace, said in the report. When rates drop by a percentage point, that can be enough for consumers to essentially refinance with a new personal loan, Patel adds.

While the Federal Reserve held interest rates steady Wednesday, previous interest rate cuts in September, October and December likely led to more personal loan borrowing at lower rates.

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