Personal loans rise to record levels

Heather Turner and her husband needed a few thousand dollars to start the adoption of a Ukrainian teenager, and their timing was good: lenders run by online businesses opened the tap for Personal loans, even if it's one According to data from the credit bureau TransUnion, personal loans have jumped to a record this year and constitute the category of consumer credit the most strong in the United States

. . Fintech companies generated 36% of total personal loans in 2017 against less than 1% in 2010, said Chicago-based TransUnion

The Turners of Lewiston, Maine, needed a fast loan and did not want to borrow. house or car. Heather Turner said that LendingClub had taken out a 3 year loan for less than $ 10,000 last October, at a rate of interest of about 23%, similar to that of a credit card. . More particularly, the loan is not guaranteed.

"Is it a perfect loan? No," Turner said in an interview. "We did not expect a low-interest, low-interest, personal loan."

Web-based companies such as LendingClub, Prosper Marketplace Inc., and Social Finance Inc., closely related, are stimulating business. expansion of personal loans. LendingClub said in a record that personal loan creations in the first quarter soared 20 percent from the previous year to $ 2.1 billion.

"Fintech lenders have a lot of credit to reinvigorate a loan category that has always existed. Laky, the leader of TransUnion's consumer credit, said in an interview. "If you think of" It's a wonderful life ", George Bailey and his bank have offered personal loans to consumers.This is a basic banking product that has existed since the beginning of the bank." [19659002] Established banks also have market share through online platforms, including LightStream from SunTrust Banks Inc. and Marcus from Goldman Sachs Inc. [19659002""EnergeticTechnologyMovements"OpportunityinGroupoftheCommonHouseworld"hasdeclaredGoldmanSachsLloydBlankfein'sGeneralReligiousDirectorinMonthlyEconomicClubdeNewYork

Such rapid growth worries some analysts about the possibility of increased consumer credit losses as interest rates rise.According to the Federal Reserve Bank In New York, total household debt in the United States hit a new high in the first quarter, with Dean Athanasia Bank of America Corp.'s consumer banking business, said last month that its firm was monitoring consumer debt by tapping on several lenders.

Don Fandetti, an analyst at Wells Fargo & Co. turned to personal loans to consolidate debt and make large one-time purchases in a reluctance to tap equity after the credit crisis. For a newer actor like Marcus or some financial technology companies, it's easier to offer personal loans than to compete with credit card lenders, who have a length of time ahead of the notoriety of the mark

. According to TransUnion, the percentage of total outstanding balance of $ 12.9 trillion in the first quarter is down. The lion's share of consumer debt comes from mortgage loans, at nearly $ 9 trillion in circulation, followed by student loans and auto loans. The personal loan segment is set to grow further as lenders pull out of areas such as credit cards and automobiles, Fandetti said.

Of course, not everyone agrees. personal loans. CEO David Nelms said at a conference in June that some fintechs "could be a little swept up on prices and credit."

But according to TransUnion's Laky, the influx of players should no problem. unhealthy for the consumer to have more choices, "he said.