 TITLE: Growth of Personal Loan Debt Slows Amid Pandemic CONTENT: Younger Generations Drove Changes in Personal Loan Debt\n-------------------------------------------------------\nSince the time personal loan debt began to increase in 2014, the composition of lenders issuing the debt has changed. In 2015, only 22% of unsecured personal loans were issued by fintech lenders (online-based technology companies), with traditional financial institutions (including brick-and-mortar banks and credit unions) accounting for the rest. That figure more than doubled by 2019, when fintech lenders accounted for 49.4% of new originations, according to an Experian report.\nThe growing popularity of fintech lenders has many implications, one of which is the inclusion of younger Americans in the borrowing pool. Among personal loans issued by traditional banks, only 28% were taken out by millennials and members of Generation Z, according to Experian. Meanwhile, 39.9% were issued by fintech lenders, a sign of the shifting digital landscape and younger generations' affinity for fintech solutions.\nIn terms of how much is being borrowed, members of Generation Z saw their personal loan balances grow the most of any age group in 2020. These consumers increased their personal loan balances by 33%, or $1,478, on average. Though millennials saw a fraction of the growth in their debt—millennials' average balance increased by just 4%—the second-youngest generation still recorded the second-highest spike in 2020.\nSource: Experian; Ages as of 2020\nThe growth in personal loans among younger generations can't all be traced to the increased popularity of fintech lenders, though. As time's gone on, many of these consumers have reached an age where taking out a personal loan is more common. Additionally, as these consumers age, their average credit scores generally increase—opening the doors to new borrowing opportunities. The confluence of these factors is likely what's driving the significant debt growth among younger Americans.\nAt the same time, the opposite pattern is appearing across the oldest generations. Baby boomers have the highest personal loan balances of any group, but they are growing this debt at the second slowest rate. The silent generation saw virtually no balance change from 2019 to 2020, as many members of the generation are retired and in the process of paring their debt down as they age by paying off mortgages, for example. END