Fintechs Have a Larger Share of Personal Loans than Banks or Credit Unions

Fintech lenders are making significant gains in the personal loan space, according to a recent TransUnion report, which follows the staggering growth of fintech lenders in the market over the past few years.

The report, called Fact versus Fiction: FinTech Lenders, was released last week during the Digital Lending + Investing Conference in New York, and shows that fintechs have a bigger share of the personal loans market than banks and credit unions.

According to the study, the loans originated by fintechs had “dramatically risen in recent years.” Last year, fintechs represented 30% of all personal loan balances, the report said. In 2012 that number was only 4% and in 2010 it was less than 1%.

This is indeed a drastic growth. And now, in the first half of this year alone, fintechs represented 32% of personal loan balances compared to 29% by banks and 24% by credit unions, respectively.

According to the report, John Wirth, vice president of FinTech strategy and market development at TransUnion, said:

The FinTech business model appears to be working nicely. Their use of the latest technologies combined with cutting edge alternative and trended data has likely helped them become leaders in the personal loan industry.

The TransUnion report categorizes the lenders in space into banks, credit unions, fintechs and traditional finance companies. The report looked at unsecured personal loan originations over the past several years, as well as a detailed portfolio performance between 2014 and 2016.

Read the full report here.

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