Fintech Surpassed Banks in Personal Loans, According to Transunion Report

Despite political uncertainty and questions surrounding Brexit abroad, the present economy seems strong and the latest Transunion Industry Insights Report seems to reflect a similar sentiment.  According to the report, loan delinquencies remain low, a reflection of low unemployment. 

As previously reported by Banking Exchange but confirmed by this report, Fintech has surpassed banks when it comes to personal loans growing to more than 38% of market share with last quarter alone having $138 Billion in personal loans.  Also, more than 178 million consumers now have access to a credit card.  The credit card balances have grown by 4.9% annually, which could be looked at as a positive or negative sign depending on how economists look at personal debt. Super prime balance growth was 6.8% year over year. 

However, the report may bring some caution to market forecasters. First, while auto loan origination grew slightly, the loans are growing in loans above prime. Analysts are skeptical that auto loans can continue to rise heading into the spring of 2019. As reported in Banking Exchange this week, there are a number of reasons to be concerned with the present auto loan market and how it is structured.  A legitimate question being raised is does the present auto loan market reflect previous housing bubble practices where lenders are receiving loans above a healthy risk level of being able to make payments if a sharp downturn in the market occurs.  

Secondly, home mortgage average balances decreased year over year, yet there was an increase in activity with subprime brokers.  The increase was by 2.1%, not a huge climb, but notably different than less risky loans.  Perhaps the way to sum up these figures is that the figures tell a somewhat cautionary tale of important trends to watch in the coming months.  

As reported by Transunion, these are the following quarterly statistics.  

Personal Loans:

• $138 billion in total balances
• Average debt per borrower: $8,402

Credit Cards:

• 178.6 million consumers have a credit card
• Average debt per borrower: $5,736

Auto:

• 82 million auto loans
• Average debt per borrower: $18,858

Mortgage:

• 52.8 million mortgage loans
• Average debt per borrower: $206,922