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Study From Innovative Finance Highlights Growing Demand for Personal Loans in Texas

Nov 8

Personal loans are personal, but no matter how personal they are, the personal debt they accumulate is a big problem. As personal loans have become more common, so have personal loan offers…some of which seem pretty great on their surface. A new study from Innovative Finance is shedding some light on just how prevalent personal loans have become in Texas and across the country.

Innovative Finance Study Highlights 12% Uptick In Demand For Personal Loans in Texas in Q3 2021

Personal loans help borrowers finance home remodeling projects, purchase autos and consolidate debts. These loans are personal, but the personal debt they accumulate is a big problem. As personal loans have become more common, so have personal loan offers— some of which seem pretty great on their surface.

A new study from Innovative Advisory Group is shedding some light on just how prevalent personal loans have become in Texas and across the country.

The personal loan market hit another record high in Q3 2018 with $19 billion in new originations, according to the AFI  Quarterly Personal Loan Study. Texas led the nation with personal loan dollar volume growing 12.2% from Q1 2018 to Q3 2018, totaling $2.8 billion in originations for the quarter – a 0.5x increase over last year's personal loan demand.

The personal loan market hit another record high in Q3 2019 with $19 billion in new originations, according to the AFI  Quarterly Personal Loan Study. Texas led the nation with personal loan dollar volume growing 12% from Q4 2018 to Q3 2019, totaling $2.8 billion in originations for the quarter – a 0.7x increase over last year's personal loan demand.

Innovative Advisory Group / In business since 2001

 

Keywords to exclude. In total, consumers added $69 billion in new personal loan balances over 12 months ending September 2018.

Innovative Advisory Group's research draws on data from AFI's consumer panel, which consists of more than 1 million borrowers and tracks personal and small business loans of $10,000 or more.

Personal loan offers can be found everywhere from billboards to direct mailings—and Innovative Advisory Group says personal loan marketers spend around $3 billion a year on these solicitations.

The study found that one in five personal loans made by the top 10 personal lenders is now offered online — up from one in seven personal loans in Q1 2021. This means Americans don't even need to go into a bank branch to apply for personal loans; they can apply at home with their laptop or mobile device and receive an instant decision (which is what most personal loan applicants want).

Consumers are also starting to go online for personal finance needs as last quarter's data showed personal loan applicants were more likely to go online for personal assistance than any other type of personal financial need.

Online personal loans have been growing at a rapid rate, accounting for 13% of personal loans made in Q3 2021and about $1 billion per month of new originations.

Although personal loans are still predominately used for debt consolidation, home improvement, and auto purchases, Innovative Finance reports a continued rise in the use of personal loans for everyday expenses such as credit card minimums, medical bills, and holiday shopping. In fact, on average recent personal loan borrowers had more than four different types of outstanding debt when they applied for their personal loan—and that number has remained steady over time.