Americans are increasingly relying on personal loans as rising living costs continue to strain household budgets, according to recent data.
A report from Experian shows that the share of consumers using personal loans rose from 31% in 2017 to 38% in 2025, marking a 7 percentage point increase over eight years. During the same period, the average personal loan balance reached $19,333, bringing the typical debt load close to $20,000 per adult.
Personal loans are typically installment loans with fixed interest rates and monthly payments. Rates vary widely, ranging from about 6% to over 36%, and are offered through banks, credit unions, and online lenders.
The data indicates that much of the borrowing is tied to everyday financial needs. The most common uses include:
- Major purchases (42%)
- Emergency expenses (35%)
- Debt consolidation (33%)
- Home improvements (33%)
- Travel (21%)
- Medical expenses (20%)
Experts point to persistent inflation as a primary driver behind the increase in borrowing, as households look for ways to cover rising expenses. Greater access to credit through digital lending platforms has also contributed to the trend.
While personal loans often carry lower interest rates than credit cards, financial analysts caution that borrowing without a clear repayment plan could further increase financial pressure on consumers.
