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Everything is growing when it comes to personal loans in the United States—from the number of loans to the amount of personal loan debt consumers are carrying.
Personal loan debt in the U.S. hit record levels in 2018, totaling more than $291 billion, according to Experian's 2018 review of personal loan debt. Personal loans are the fastest-growing type of consumer debt in the country, and in the past year, balances have increased 11.9%.
The number of individual outstanding personal loans grew to 36.8 million in 2018, with more than 10.8% of adults in the U.S. carrying a personal loan balance. Compared with previous years, the number of loans grew 16% since 2017 and 42% since 2015.
When it comes to where in the U.S. people are borrowing, personal loan debt has no boundaries. But when broken down by city, the range of debt is drastic—with some cities carrying an average of more than $200,000 in personal loan debt and other cities maintaining average balances of less than $5,000.
Check out this list of the top 25 U.S. cities with the highest personal loan debt to see if your city made the list.
|Top 25 Cities With the Highest Personal Loan Balances|
|Rank||City||Average Personal Loan Debt|
|3||Palos Verdes Estates, CA||$133,060|
|5||La Canada, CA||$120,862|
|7||Burr Ridge, IL||$107,527|
|8||Mountain Brook, AL||$95,026|
|9||San Luis Obispo, CA||$90,395|
|12||New Canaan, CT||$84,708|
|13||St. Simons Island, GA||$84,112|
|17||Bryn Mawr, PA||$69,213|
|20||Ranchos Palos Verdes, CA||$63,693|
|23||Nevada City, CA||$60,710|
|25||Box Elder, SD||$58,702|
Cities With Top Personal Loan Balances Also Have High FICO® Scores
When looking at the cities with the top average personal loan balances, nearly one-third of the top cities were located in California, according to Experian data from the fourth quarter of 2018. As a state, California's average personal loan balance was only $15,639—which in some cases is less than one-tenth the debt the top cities within California carried.
Average FICO Scores among the top 25 cities were also high—with each top city boasting an average FICO Score that was, on average, 53 points higher than the national average of 701. To accumulate such large amounts of a certain type of debt, consumers typically need to have top-tier credit history—and borrowers in these cities had average FICO Scores that fell into the "very good" range.
Check Your Credit Reports and Scores Before Applying for a Personal Loan
If you're thinking about getting a personal loan, it's a good idea to first check your credit reports and scores so you know what lenders will see when considering your application. Also check out Experian CreditMatch™, which uses your FICO Score to pair you with personalized offers for credit cards and personal loans that are right for you.
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. MSA is the acronym for metropolitan statistical area, which groups counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on April 22, 2019, and has been updated.