Authored By: Sarah
11 Jul 2024

 Personal Loans Market Size to grow by USD 623.3 billion between 2024-2028

According to a research report “ Personal Loans Market” by Application (Short term loans, Medium term loans, Long term loans) Type (P2P marketplace lending, Balance sheet lending) Geography (North America, Europe, APAC, South America, Middle East and Africa)- Global Forecast to 2028 published by Technavio, the market size is estimated to grow by USD 623.3 billion, at a CAGR of  13.54% during the forecast period. In the banking and financial sector, enterprises are embracing technological advancements to deliver enhanced solutions and optimized portfolios to their clients. The lending landscape is undergoing significant transformations with the digitization of the industry. For instance, cloud-based payment platforms enable financial organizations to process payments more efficiently, reducing processing times. Additionally, these solutions facilitate the initiation of loans online, prompting some financial institutions to adopt innovative marketing strategies. Furthermore, the adoption of digital platforms, such as in-memory and columnar databases, enables the electronic storage of documents, thereby reducing paper usage. These advancements are revolutionizing the personal loans market, offering faster services and up-to-date functions to meet the evolving needs of consumers.

Browse market data tables, figures, and in-depth TOC on “Personal Loans Market” by Application (Short term loans, Medium term loans, Long term loans) Type (P2P marketplace lending, Balance sheet lending) Geography (North America, Europe, APAC, South America, Middle East and Africa) Global Forecast to 2028. Download Free Sample

 

By Application, the Short term loans segment is projected to dominate the market size in 2024

The Personal Loans Market is dominated by the Peer-to-Peer (P2P) marketplace lending segment, which accounts for a significant market share. Notably, P2P lending operates independently of traditional financial institutions, allowing individuals to borrow loans directly from investors. This model offers higher returns to investors and lower interest rates for borrowers, making it an increasingly popular choice. The P2P segment's accessibility and benefits are fueling its demand and driving market growth. Simultaneously, the Balance Sheet Lending segment is projected to register a steady growth rate due to its inherent transparency and role in bridging the gap between lenders and debtors.

By Type, P2P marketplace lending  segment is expected to hold the largest market size for the year 2024

The short-term personal loan market segment witnesses substantial growth due to the ease of availability and flexibility of these loans. Unlike conventional loans, short-term personal loans do not require collateral and must be repaid within a year or less. This makes them an attractive option for individuals seeking quick access to funds for various personal or business purposes, such as the financing of urgent assets like accounts receivable and inventories. The tenure for unsecured short-term loans typically ranges between six to twelve months. Consequently, the convenience and accessibility of short-term personal loans contribute to their increasing popularity within the global personal loans market.

North America is forecasted to hold the largest market size by region in 2024

The personal loans market represents a significant business sector, catering to consumers seeking financing for various personal expenses. This market encompasses a wide range of loan types, including secured and unsecured loans, with competitive interest rates and flexible repayment terms. Financial institutions and fintech companies are key players, leveraging technology to streamline applications and disbursement processes, ensuring a seamless borrowing experience for consumers.

The Personal Loans Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:

  • Axis Bank Ltd.
  • Bajaj Finserv Ltd.
  • Canara Bank
  • Cholamandalam Investment and Finance Co. Ltd.
  • Citigroup Inc.
  • Finbud Financial Services Pvt Ltd
  • HDFC Bank Ltd.
  • HSBC Holdings Plc
  • ICICI Bank Ltd.
  • IDBI Bank Ltd.
  • Indian Overseas Bank
  • Mahindra and Mahindra Financial Services Ltd.
  • PPF Group
  • Punjab National Bank
  • State Bank of India
  • Tata Sons Pvt. Ltd.
  • UCO BANK
  • Union Bank of India
  • Whizdm Innovations Pvt. Ltd.
  • Yes Bank Ltd.
.

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Research Analysis Overview

The personal loans market is experiencing a significant shift towards digitalization, with loan assessments increasingly being driven by AI technology and automation. Credit history is a crucial factor in determining eligibility for personal loans, and digital credit platforms use big data analytics to evaluate applications quickly and accurately. Short-term financing is a popular choice for many borrowers, and digitalization has made the lending process faster and more convenient. However, penalties for late payments and managing bad debts remain challenges for online loan providers. AI and chatbots are transforming loan applications, enabling real-time assessments and personalized offers. Collateral is still a consideration for some lenders, but digitalization is reducing its importance. Employment status and borrowing limits are key factors influencing interest rates. Competitive insights from credit unions and online providers are driving innovation, with cloud computing and balance sheet lending also playing a role. Credit cards offer an alternative to personal loans, but their high-interest rates make them less attractive for many borrowers. The Personal Loans Age continues to evolve, with transparency, convenience, and affordability being key drivers of growth.

Market Research Overview

Personal loans are a type of consumer credit extended to individuals for various personal reasons, including urgent needs, fantasy weddings, home improvements, and debt consolidation. The loan length can vary from short-term financing to long-term home loans and gold loans. The approval process involves examining an applicant's profession, employment history, financial institutions, and credit history. In today's competitive environment, traditional financial institutions face obstacles from fintech companies offering instantaneous loans through digital credit platforms. AI technology, big data analytics, and chatbots have automated loan assessments, making the process quicker and more efficient. However, personal loans come with penalties such as origination fees, prepayment penalties, and interest rates that depend on the borrowing limits and employment status. Collateral may be required for secured loans, while unsecured loans rely on credit history. The personal loans market is vast, with loan volumes increasing due to digitalization and economic uncertainty. Consumers can now apply for loans from online loan providers, credit unions, and banks, making it essential to stay aware of competitive insights, including credit cards and balance sheet lending. Moreover, the age of personal loans is evolving, with the rise of startups like Zopa and the integration of cloud computing and AI technology. As the market continues to grow, it's crucial to understand the implications of these trends on the personal loans landscape.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/

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