Personal Loan Rates and Debt Statistics in 2023

Personal loan rates are elevated in 2023, and some lenders have tightened underwriting criteria in response to more delinquencies.
Annie Millerbernd
By Annie Millerbernd 
Edited by Kim Lowe

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Personal loans accounted for $241 billion in consumer debt in the third quarter of 2023, a $31 billion increase from the same quarter in 2022, according to data from the credit bureau TransUnion


Personal loans are offered by banks, credit unions and online lenders. They're typically unsecured and can be used for almost any reason. Lenders consider loan applicants’ creditworthiness, income and level of debt to qualify them and determine their annual percentage rates.

Public data on personal loans is unusually sparse compared to mortgages and student loans, but some credit agencies track information on personal loan debt. The data below shows how that debt has changed over time.

Recent facts about personal loans

  • Total personal loan balances reached $241 billion in the third quarter of 2023, up nearly 15% from the same time in 2022, according to TransUnion.

  • Personal loan delinquency rates remain somewhat high at 3.75% in Q3 of 2023, but they have lowered from their peak of 4.14% in Q4 2022. Lenders have raised underwriting standards to avoid lending to those who may be unable to repay, likely leading to a drop in delinquency rates.

  • The baby boomer generation holds the highest average personal loan debt, according to Experian, but Generation X is quickly gaining on them.

  • Personal loan rates have been increasing steadily for more than a year now. Average personal loan rates rose from Q2 2023 to Q3 2023 at banks, credit unions and across all credit bands with online lenders.

Average personal loan rates

Personal loan rates aren’t heavily affected by occasional increases in the federal funds rate, but if the Fed pushes rates high enough, personal loan rates will also rise. Lenders also adjust rates based on supply and demand as well as large economic shifts.

Average personal loan annual percentage rates differ across online lenders, banks and credit unions, in part because they target different borrowers.

Online loans

Online loan rates usually range from 5.99% to 35.99%. An online lender may cater to a specific audience — like bad-credit borrowers or those who want to consolidate debt — which can influence the rates it offers. In general, borrowers with good and excellent credit (scores above 690) get the lowest rates. However, lenders consider many factors, including income and outstanding debts, to determine your rate.

Bank loans

The average APR for a two-year bank loan is 12.17%, according to data from the Federal Reserve

The Federal Reserve. Consumer Credit Outstanding for August 2023. Accessed Nov 27, 2023.
. Large banks prefer borrowers with good or excellent credit, and some banks offer perks or rate discounts to existing customers.

Credit union loans

The average APR on a three-year credit union loan is 10.58%, according to the National Credit Union Administration

National Credit Union Administration. Credit Union and Bank Rates 2023 Q3. Accessed Jul 13, 2023.
. Federal credit unions cap APRs at 18%, so their rates typically skew lower than other lenders. A credit union may look beyond a personal loan applicant’s credit profile and consider their standing as a member, helping those with fair or bad credit (scores below 690) qualify.

Average personal loan size

The average new personal loan was $7,700 in the second quarter of 2023, according to a credit industry report from TransUnion. Average loan amounts have been between $6,000 and $8,100 in recent years.

Personal loan borrowing purpose

The most common reason NerdWallet users said they wanted to get a personal loan in the first quarter of 2023 was to consolidate credit cards and other debts, according to aggregate, anonymized data from NerdWallet’s lender marketplace.

Total personal loan debt in the U.S.

Total personal loan debt in the U.S. has grown steadily over the past several years with the exception of 2020.

Personal loan delinquency rates

According to TransUnion, 3.75% of personal loan borrowers were late on their personal loan payments by 60 days or more in the third quarter of 2023. Many lenders have hardship policies to help borrowers avoid defaulting. Lenders usually don’t report a loan in hardship as delinquent to the credit bureaus.

Average personal loan debt by state

Each year, credit bureau Experian releases an analysis of credit report data that breaks down personal loan debt by state. The data shows that in 2022 more debt was concentrated in the northern Midwest and Pacific Northwest than on the East Coast.

A state’s average personal loan debt could be affected by things like cost of living and loan purpose. Even a small number of very large loans could throw the average off.

Unlike the average new personal loan balance, average personal loan debt can include more than one personal loan and isn’t necessarily new.

These were the states with the highest average personal loan debt in 2022, according to Experian


  • Washington: $30,648.

  • Oregon: $29,247.

  • North Dakota: $27,856.

Places with the lowest average personal loan debt in 2022:

  • Washington, D.C.: $12,250.

  • Georgia: $14,838.

  • New York: $14,890.

Personal loan debt by generation

Baby boomers had the highest average amount of personal loan debt in 2022, but it grew fastest among millennials and Generation Z, according to Experian.

Here’s how much average personal loan debt each generation has, according to the credit bureau’s report.

  • Generation Z (18-25): $7,684.

  • Millennials (26-41): $15,101.

  • Generation X (42-57): $20,677.

  • Baby boomers (58-76): $21,644.

The personal loan amount you qualify for is tied to your income and creditworthiness. As Gen Zers increase their income and build their credit, their personal loan balances may also rise.

Economic shifts raise personal loan APRs

Quarterly increases in the federal funds rate (the rate that banks borrow at) contributed to a spike in personal loan rates in the middle of 2022. As a result, personal loan rates are the highest they’ve been since before the Great Recession.

For borrowers, that means it’s likely more expensive to consolidate credit card debts and finance home improvement projects with a personal loan than it would have been a year or two ago. Higher interest rates have been reported across most financial products, including credit cards and home equity loans.

Some personal loan lenders have also tightened underwriting requirements to avoid lending to borrowers who may default, meaning those with fair and bad credit (scores below 690) may struggle to qualify. If unemployment remains low and delinquency rates for credit cards and personal loans flatten in early 2024, lenders may soften borrowing requirements.

Buy now, pay later plans gain more momentum

Apps that provide “buy now, pay later” loans continue to gain popularity as traditional financing options like credit cards and personal loans exclude fair- and poor-credit consumers. It’s now estimated that more than 80 million consumers use BNPL. Adding to the momentum, Apple introduced its own BNPL product (Apple Pay Later) for the company’s mobile wallet users in 2023.

The Consumer Financial Protection Bureau indicated in 2022 that it intends to provide regulatory guidance for the BNPL industry. The bureau released a new report about the industry in 2023, but has yet to announce specific guardrails.

Key terms to know about personal loans

Annual percentage rate is the interest rate on your loan plus all fees, calculated on an annual basis and expressed as a percentage. Use the APR to compare loan costs from multiple lenders.

An origination fee is a one-time, upfront fee that some lenders charge for processing a loan. The fee can range from 1% to 10% of the loan amount, and lenders typically deduct it from your loan proceeds.

The debt-to-income ratio divides your total monthly debt payments by your gross monthly income, giving you a percentage. Lenders use DTI — along with credit history and other factors — to evaluate a borrower's financial ability to repay a loan.

Lenders that offer pre-qualification typically do so using a soft credit check, which allows you to see rates and terms you qualify for without affecting your credit score. If you accept the loan offer, the lender will perform a hard check to confirm your information. Hard checks knock a few points off your credit score.

See if you pre-qualify for a personal loan – without affecting your credit score
Just answer a few questions to get personalized rate estimates from multiple lenders.

on NerdWallet

Comparing options? See if you pre-qualify for a personal loan - without affecting your credit score
Just answer a few questions to get personalized rate estimates from multiple lenders.

on NerdWallet

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