Americans are eager to get personal loans, and they can use them as quick cash to pay for from a vacation to credit card debt, which can be a dangerous sign for the economy. Equifax’s data shows that personal loans have grown more than 10% from a year ago, and this rapid growth has not seen on a sustained basis since the Great Depression. All three significant consumer credit agencies – Equifax, Experian, and TransUnion – have reported double-digit growth in recent months. The experts are surprised that when the economy is in good shape, and the wages of many workers are growing, thousands of Americans have taken on so much personal loan debt, which raises questions about why so many people are looking for extra cash.
Mr. Mark Zandi, a chief economist at Moody’s Analytics is a subsidiary of Moody’s Corporation, which monitors consumer credit, said: There will be an adage in banking. If it grows like weeds That might be weeds. Personal loans are unsecured debt, which means that if someone can’t repay the loan, there is no basic asset like a house or car that can support the loan. According to Experian, the average personal loan balance is US$ 16,259, a level similar to credit card debt.
Experian found that over the past five years, the personal loan balance of more than US$ 30,000 has increased by 15%. According to the Federal Bank of New York, the trend is that the US consumer deficit has reached record levels. In recent years, the rapid growth of personal loans has coincided with the explosive growth of the FinTech explosion of websites and apps, and these applications and sites have made these loans a simple process that can be done in a comfortable living room. According to TransUnion, FinTech companies account for nearly 40% of personal loan balances, compared to only 5% in 2013. TransUnion also found that more than 20 million Americans own these unsecured loans, twice as many as those who had such debts in 2012. Liiz Pagel, senior vice president of consumer loans at TransUnion, said: “Individuals can get loans very fast and get a very smooth and sleek online experience.” “In the financial services sector, we rarely see such major.