With the new year just days behind us, and as the uptick in holiday spending comes back down, debt consolidation will take precedence along with the making (and breaking) of new year’s resolutions.
Personal loans were the fastest growing unsecured lending product for much of last year. From debt consolidation to major purchases, consumers are increasingly choosing these flexible, easy-access loans over credit cards throughout the course of the year.
Recent Experian research highlighted the trends around this fast-paced lending product:
Previously, while industry experts had predicted a leveling off of personal loans originations, Experian data shows steady growth. Additionally, there were 35.7 million personal loan trades in the second quarter, the highest number to date since Q1 of 2007.
What is driving this growth? Observations suggest growth trends across the industry as a whole – not just in the personal loans segment.
And the numbers prove it. Growth is occurring across the board.
Experian statistics show:
- Consumer confidence is up 5.6% year over year
- Investor confidence remains high – up 18% year over year since 1987
- Unemployment remains low and continued decrease is forecasted in the near future
With increased confidence and increased spending often comes increased personal loans. More financial institutions are bringing personal loans under their roofs.
As many consumers enter each new year as part of a “debt consolidation nation” per se, focus for many will be on personal loans as they seek to consolidate revolving debt. Since this is a known trend, lenders across the board – from traditional financial institutions to fintechs – need to be strategic with their marketing efforts in order to reach the right consumers with the right products at the right time.
Consumers consider important factors in choosing the lender(s) for their personal loans including interest rate and the ability to apply online among others. These factors see differences across generations as well.
These factors and others should influence lenders’ marketing strategies, on top of their best practices. Experian partnered with Mintel Group for their insights on the 2019 trends and best practices for digital credit marketing. Register for our upcoming webinar to learn more about Digital Credit Marketing 2019 Trends and Best Practices.