Tag: Gen Y credit

Unsecured lending is increasing. And everyone wants in. Not only are the number of personal loans increasing, but the share of those loans originated by fintech companies is increasing. According to Experian statistics, in August 2015, 890 new trades were originated by fintechs (or 21% of all personal loans). Two years later, in August 2017, 1.1 million trades belonged to fintechs (making up 36% of trades). This increase is consistent over time even though the spread of average loan amount between traditional loans and fintech is tightening. While convenience and the ability to apply online are key, interest rates are the number one factor in choosing a lender. Although average interest rates for traditional loans have stabilized, fintech interest rates continue to shift higher – and yet, the upward momentum in fintech loan origination continues. So, who are the consumers taking these loans? A common misconception about fintechs is that their association with market disruption, innovation and technology means that they appeal vastly to the Millennial masses. But that’s not necessarily the case. Boomers represent the second largest group utilizing fintech Marketplace loans and, interestingly, Boomers’ average loan amount is higher than any other generational group – 85.9% higher, in fact, from their Millennial counterparts. The reality is the personal loan market is fast-paced and consumers across the generational spectrum appear eager to adopt convenience-based, technology-driven online lending methods – something to the tune of $35.7 million in trades. For more lending insights and statistics, download Experian’s Q2 2018 Personal Loans Infographic here.   Learn More About Online Marketplace Lending Download Lending Insights

It’s official. Millennials have surpassed Baby Boomers in population size, according to the US Census. And while they are quick to adopt the “selfie” and all things social, they have been slow to embrace the world of credit. Sure, there’s been increased regulation over the past decade, and coming into adulthood in the midst of the Great Recession hasn’t helped. But don’t count Millennials out of the credit game just yet. A deeper, more segmented view of this digital-dependent generation shows a very diverse population with plenty of opportunity for lenders. Plus, their sheer size in numbers and $200 billion in annual buying power demand financial institutions evolve to accommodate this massive market. As Gen Y comes of age, there is growing evidence they are open to building and growing their personal credit history. But if financial institutions wish to capture the attention and business of this demographic, they must adapt, leveraging deeper segmentation insights with more effective prospecting strategies to reach them. Experian's data reveals key trends in terms of how this generation is utilizing credit, tips and tools to find the most credit-ready individuals, and strategies to grow the thin-file Millennials as they come of age. “Given the significance millennials play in financial services and the credit marketplace, it is crucial to understand this influential consumer segment and how they use credit as a tool,” said Michele Raneri, vice president of analytics and business development. “While this generation may not look like they are on the right track financially, it’s important to keep in mind that credit scores are built on credit experiences, and while this generation has been slower to use credit, they have plenty of opportunities to build a positive credit history.” To learn more about Millennials and credit, visit Experian.com/millennials.