The Average Personal Loan Balance Rose 3.7% in 2021

Quick Answer

The average personal loan balance increased by 3.7% in 2021 to $17,064 as consumers began to recover from economic uncertainty caused by the pandemic.

The Average Personal Loan Balance Rose 3.7% in 2021 article image.

Personal loans have grown in popularity and overall balance in the past decade as consumers looking to consolidate existing loans and lower their interest payments gravitated to them.

As of the third quarter (Q3) of 2021, outstanding consumer personal loan debt grew to $436.18 billion. This total, as well as the average balance consumers carry, continues a trend of steady growth, even as other types of debt balances declined during the pandemic.

Outstanding personal loan debt comprises $133.17 billion in unsecured loans and $303 billion in secured personal loans. Secured loans generally require some sort of collateral, and this loan category also includes credit products such as timeshare and RV loans that don't quite fit in with mortgages, auto loans and other types of debt.

Overall Personal Loan Debt in the U.S. Grows 5.9%

Even during the beginning of the pandemic in 2020, when most other types of loan balances decreased, personal loans continued to grow. And in 2021, personal loans continued their steady annual increase.

Snapshot: Total Personal Loan Debt
2019 2020 2021 2020-2021 Change
Total unsecured personal loans $131.53B $127.27B $133.17B +$5.90B (+4.6%)
Total secured personal loans $271.39B $284.53B $303.01B +$18.48B (+6.5%)
Total combined balance $402.92B $411.80B $436.18B +$24.38B (+5.9%)

Source: Experian data from Q3 of each year

Unsecured loans grew by $5.9 billion in 2021, to $133.2 billion, across some 22.4 million accounts.

Secured loans, where a consumer borrows funds while providing collateral (such as securities like stocks and mutual funds, or assets like a recreational vehicle) grew by $13 billion in 2021 to $303 billion, a 6.5% jump. There were fewer secured loans outstanding in 2021 than in 2020, but the 25.8 million unsecured loans are an increase from prepandemic levels.

Snapshot: Number of Personal Loan Accounts
2019 2020 2021 2020-2021 Change
Total unsecured personal loans 21.2M 21.7M 22.4M +3.2%
Total secured personal loans 25.4M 26.2M 25.8M -1.5%

Source: Experian data from Q3 of each year

As for personal loan balances, they continue to inch higher, a function of both increased demand for personal loans as well as inflationary pressures. Economic conditions have affected both the amounts lenders originate for loans as well as the interest rates on those newer loans, which are also increasing. As a result, consumers are beginning to pay more interest for personal loans than in prior years.

The average personal loan balance in 2021 was $17,064, according to Experian data. This is across 22.4 million unsecured loans as well as 25.8 million secured loans. (Some consumers may have more than one personal loan.)

Snapshot: Average Personal Loan Debt
2019 2020 2021 2020-2021 Change
Average personal loan balance $16,259 $16,458 $17,064 +3.7%

Source: Experian data from Q3 of each year

Average Personal Loan Debt Increase in 43 States and D.C.

In 2021, 43 states and Washington, D.C., saw average personal loan balances increase. The remaining seven states with declines were scattered around the nation. Although the average balance nationally is just over $17,000, consumers in 12 states now sport balances above an average of $20,000 or greater.

Average Personal Loan Balance by State
2020 2021 Change
Alabama $13,966 $14,429 +3.3%
Alaska $19,288 $20,631 +7%
Arizona $20,037 $21,647 +8%
Arkansas $20,218 $20,828 +3%
California $16,842 $17,829 +5.9%
Colorado $21,725 $22,693 +4.5%
Connecticut $14,102 $14,925 +5.8%
Delaware $16,724 $17,219 +3%
District of Columbia $10,459 $12,241 +17%
Florida $17,948 $18,768 +4.6%
Georgia $13,208 $13,461 +1.9%
Hawaii $12,585 $12,538 -0.4%
Idaho $22,620 $23,869 +5.5%
Illinois $13,723 $14,161 +3.2%
Indiana $15,380 $16,287 +5.9%
Iowa $18,154 $18,654 +2.8%
Kansas $18,982 $19,287 +1.6%
Kentucky $15,471 $16,225 +4.9%
Louisiana $17,363 $17,478 +0.7%
Maine $16,079 $17,170 +6.8%
Maryland $14,725 $14,902 +1.2%
Massachusetts $14,811 $14,573 -1.6%
Michigan $15,418 $15,700 +1.8%
Minnesota $17,748 $18,285 +3%
Mississippi $14,688 $14,926 +1.6%
Missouri $16,028 $16,943 +5.7%
Montana $24,964 $25,530 +2.3%
Nebraska $18,368 $18,188 -1%
Nevada $19,241 $20,259 +5.3%
New Hampshire $17,828 $17,992 +0.9%
New Jersey $13,927 $14,149 +1.6%
New Mexico $17,968 $19,599 +9.1%
New York $14,431 $14,112 -2.2%
North Carolina $15,929 $16,367 +2.7%
North Dakota $24,869 $23,409 -5.9%
Ohio $15,361 $15,707 +2.3%
Oklahoma $17,158 $18,055 +5.2%
Oregon $27,208 $28,987 +6.5%
Pennsylvania $14,643 $15,084 +3.0%
Rhode Island $13,981 $13,960 -0.2%
South Carolina $15,350 $15,404 +0.4%
South Dakota $25,205 $24,695 -2%
Tennessee $15,578 $16,410 +5.3%
Texas $15,273 $16,154 +5.8%
Utah $18,737 $19,832 +5.8%
Vermont $17,551 $18,083 +3%
Virginia $14,868 $15,370 +3.4%
Washington $28,450 $29,997 +5.4%
West Virginia $17,126 $17,832 +4.1%
Wisconsin $17,041 $17,866 +4.8%
Wyoming $24,421 $26,413 +8.2%

Source: Experian data from Q3 of each year

Among the places where loan balances grew the most, Washington, D.C., is an outlier in more ways than one. In the nation's capital, average balances grew faster than any other state: 17% since 2020. Still, D.C.'s current average balance of $12,241 is the lowest in the nation. Another thing to note is that D.C. resides on the coast opposite that of states with similarly large percentage jumps, which are all in the west: Alaska, Arizona, New Mexico and Wyoming.

States With the Fastest-Growing Average Personal Loan Balances
2020 2021 Change
District of Columbia $10,459 $12,241 +17.0%
New Mexico $17,968 $19,599 +9.1%
Wyoming $24,421 $26,413 +8.2%
Arizona $20,037 $21,647 +8.0%
Alaska $19,288 $20,631 +7.0%

Source: Experian data from Q3 of each year

Looking at the states with the highest average balances, the West Coast—specifically the Pacific Northwest—is well represented.

States With the Highest Average Personal Loan Balances
2020 2021 Change
Washington $28,450 $29,997 5.4%
Oregon $27,208 $28,987 6.5%
Wyoming $24,421 $26,413 8.2%
Montana $24,964 $25,530 2.3%
South Dakota $25,205 $24,695 -2.0%

Source: Experian data from Q3 of each year

At the other end of the spectrum, North Dakota experienced the largest decline in average personal loan balance, followed by New York and South Dakota.

States Where Average Personal Loan Balances Declined in 2021
2020 2021 Change
North Dakota $24,869 $23,409 -5.9%
New York $14,431 $14,112 -2.2%
South Dakota $25,205 $24,695 -2.0%
Massachusetts $14,811 $14,573 -1.6%
Hawaii $12,585 $12,538 -0.4%
Nebraska $18,368 $18,188 -1.0%
Rhode Island $13,981 $13,960 -0.2%

Source: Experian data from Q3 of each year

For most of these states, the declines reduced average balances that were already below the national average. There's significant overlap among the states with low average personal loan balances as well as declines in overall balances in 2021.

Gen X and Baby Boomers Hold Above-Average Personal Loan Balances

Among the generations, average personal loan balances echo those of other types of debt. The fastest growth is occurring among younger borrowers, but older borrowers tend to have larger balances.

Generation X, with an average personal loan balance of $18,922, exceeds the national average by nearly $2,000. And baby boomers, perhaps surprisingly, have an average personal loan balance that exceeds $20,000, according to Experian data.

Average Personal Loan Balance by Generation
2020 2021 Change
Generation Z (18-24) $6,004 $6,658 +10.9%
Millennials (25-40) $12,306 $13,418 +9.0%
Generation X (41-56) $17,733 $18,922 +6.7%
Baby boomers (57-75) $19,700 $20,370 +3.4%
Silent generation (76+) $17,123 $17,334 +1.2%

Source: Experian data from Q3 of each year; ages as of 2021

Why do balances bulge for the baby boomer generation? One explanation is that they're the most likely to have both the need and the means to borrow for big-ticket items that tend to accrue as a household ages. Family vacations, weddings and moving expenses for both their children and their aging parents are still expenses boomers (and now Generation X) are more likely to pay than other generations.

Expect Personal Loan Balances and Interest Rates to Rise in 2022

It's expected that personal loan balances will continue to grow unabated in 2022, in part because of the increase in interest new borrowers will pay. In addition, the total number of personal loans outstanding has more than doubled since 2013, from 22 million to more than 48 million in 2021. Amounts outstanding have also more than doubled from the $171 billion in 2013 (combining both secured and unsecured loans) to more than $436 billion today.

Borrowing costs for personal loans were lower in 2021. But that's certainly changing, as interest rate increases from the Federal Reserve will impact personal loans as much as other types of loans. Nonetheless, banks are still willing to lend to creditworthy borrowers, according to the latest Senior Loan Officer Survey from the Federal Reserve, and many borrowers may consider refinancing higher interest debt on their books—especially credit cards.

Average APRs of credit cards are significantly higher than average personal loan rates, which explains why debt consolidation is one of the most popular reasons to obtain a personal loan. Moreover, personal loans are generally fixed-rate loans, and nearly all credit cards today have variable rates, which means credit card balances are likely to accrue more interest charges in the months ahead.

Learn More About Personal Loan Debt

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

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