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The personal loans market size is estimated to increase by USD 476.25 billion and grow at a CAGR of 11.79% between 2023 and 2027. The growth of the market depends on several factors, including the use of advanced technologies in the loan process, the rising requirement for money to fund lifestyles, and the increasing migration to smart urban cities. The use of advanced technologies is driving market growth. Banking and financial institutions are adopting AI and software to streamline loan processes, offering improved solutions to customers. AI facilitates online loan management, analysis, and fund disbursal, benefiting lenders and borrowers. The focus on streamlining loan operations through technology will drive the growth of the global market during the forecast period.
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This market report extensively covers market segmentation by application (short-term loans, medium-term loans, and long-term loans), type (P2P marketplace lending and balance sheet lending), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
The market share growth by the short-term loans segment will be significant during the forecast period. The function of short-term loans is like that of conventional loans. The only difference is that in short-term loans, the debt must be paid off within a year or less. It is easier to borrow for a period of time due to the fact that no collateral is required in respect of private loans. Hence, there will be considerable growth in the segment of short-term loans throughout the forecast period because it is easier for people to avail themselves of them.
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The short-term segment shows a gradual increase in the market share of USD 240.72 billion in 2017 and continue to grow by 2021. Short-term loan for business is usually taken for the financing of urgent assets such as accounts receivable and inventories. The short-term loan also makes it easier for borrowers to maintain a positive cash flow situation. Thus, the benefits associated with short-term loans will augment the demand during the forecast period.
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North America is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The market in North America is expected to grow during the forecast period, as countries in this region, such as the US, are among the most technologically advanced countries and are pioneers in the adoption of technologies such as AI and the Internet of Things (IoT). The top commercial lending banks in this region, such as Goldman Sachs, American Express, and Bank of America Corp., are investing in AI and IoT technologies by offering new applications and interfaces to provide better service to their customers. Thus, the presence of key companies in the region will drive the growth of the market in focus during the forecast period.
Personal Loans, a cornerstone of financial management, are influenced by various factors such as employment status, interest rates, and borrowing limits. Emerging trends like P2P Marketplace Lending and Balance Sheet Lending redefine lending landscapes. Challenges like bad debts and penalties underscore the importance of digitalized business operations leveraging technologies like chatbots, big data analytics, and artificial intelligence for efficient loan assessments and risk management. Increasing awareness and digitalization pave the way for innovations like digital credit platforms, offering short-term financing and quick lending processes driven by automation and AI technology.
The rise in the adoption of cloud-based personal loan servicing software offerings is a primary trend in the personal loan market. The adoption of cloud computing is growing speedily all over the world due to the flexibility and cost benefits of cloud services. Organizations from all over the world are focusing their efforts on reducing overall capital expenditure and promoting new technologies with reduced CAPEX. To exploit the scaleability of hardware and resources provided by internet service providers, small firms and start-ups are taking advantage of Cloud solutions. Organizations can scale their workload when required, eliminating the need to set up their own data centers.
With the rise in the adoption of cloud-based services, vendors in the market have started to offer cloud-based loan servicing software. A few vendors are forming partnerships and collaborations to introduce cloud-based solutions for financial institutes and gain more customers. Financial organizations have started using cloud-based loan servicing software due to the various benefits. The increasing use of cloud-based loan servicing software can boost the global market.
The compliance and regulatory challenges related to loan is a major challenge in the market. Governing bodies subject financial institutions to follow certain requirements, regulations, compliances, and guidelines with the aim of maintaining the integrity of the financial system. There is no new legislation in the financial sector, but an extensive update over the last ten years has taken place. Adhering to these regulations across different regions, such as North America and APAC, can be a challenging task for lenders.
Regulations and compliances change in each region and must be adhered to by financial organizations. In the case of a bank or finance institution operating in separate regions, it must comply with various rules set out by the Governments and Financial Institutions within those regions. In order to reduce the cost of compliance management, banking, and financial services firms are increasingly using technological solutions. Personal loan providers should update their solutions to be compliant with the laws and regulations that are changing continuously. Thus, these factors are anticipated to restrain the growth of the global market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Axis Bank Ltd. - The company offers personal loans up to Rs 40 lakhs with a tenure of up to 60 months.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
In today's dynamic financial landscape, the market thrives on various factors like employment status, interest rates, and borrowing limits. With the emergence of fintech companies and online loan providers, obtaining personal loans has become more accessible. This market is influenced by digitalized business operations, employing tools such as chatbots, big data analytics, and artificial intelligence to streamline processes and enhance customer experiences. From debt consolidation to home renovations, personal loans cater to diverse needs, facilitated by short-term financing options and quick lending processes. However, challenges like credit history scrutiny and economic uncertainty persist.
Despite this, the market continues to evolve, driven by innovation and changing consumer demands. In the landscape of Personal Loans, factors like Personal Loans Age and Competitive Insights shape consumer decisions. Traditional options like credit unions and credit cards coexist with newer alternatives, while challenges such as bad debts and penalties underscore the importance of responsible borrowing. Platforms like Zopa offer innovative solutions, leveraging digitalization, automation, and AI technology to streamline processes and enhance loan assessments for individuals. From addressing urgent needs to financing home improvements or dream weddings, personal loans cater to diverse requirements, emphasizing convenience and flexibility. However, borrowers must navigate through origination fees, prepayment penalties, and the approval process, ensuring informed decisions aligned with their financial goals and needs.
In the dynamic realm of personal finance, individuals navigate a landscape shaped by factors such as awareness and employment history. Digital credit platforms offer solutions like instantaneous loans, streamlining the approval procedure and accommodating varying loan volumes. Amidst a competitive environment, borrowers consider factors like loan length and repayment, whether it's for everyday needs, dream weddings, or substantial investments like home loans or gold loans.
Personal Loans Market Scope |
|
Report Coverage |
Details |
Page number |
152 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.79% |
Market growth 2023-2027 |
USD 476.25 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.07 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 46% |
Key countries |
US, Canada, China, India, and the UK |
Competitive landscape |
Leading Companies , Market Positioning of Companies , Competitive Strategies, and Industry Risks |
Key companies profiled |
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., and Yes Bank Ltd. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our Market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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