Unsecured Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Type (Personal Loan, Education Loan, Credit Card Loan, Agricultural Loan, Home Improvement Loan and Others (Short Term Business Loan, Consumer Durable Loan etc.), By Provider Type (Bank and Non-Banking Financial Companies and Others (Fintech Companies)), By Interest Rate (Fixed and Floating), By Tenure (Less than 3 Years, 3-5 Years and More than 5 Years), By Region, Competition
Published Date: February - 2025 | Publisher: MIR | No of Pages: 320 | Industry: BFSI | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationUnsecured Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028, Segmented By Type (Personal Loan, Education Loan, Credit Card Loan, Agricultural Loan, Home Improvement Loan and Others (Short Term Business Loan, Consumer Durable Loan etc.), By Provider Type (Bank and Non-Banking Financial Companies and Others (Fintech Companies)), By Interest Rate (Fixed and Floating), By Tenure (Less than 3 Years, 3-5 Years and More than 5 Years), By Region, Competition
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Global Unsecured Business Loans Market
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Market Size and GrowthThe global unsecured business loans market is projected to grow from approximately $4.5 trillion in 2023 to $5 trillion in 2024, reflecting a compound annual growth rate (CAGR) of about 11%.
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Future Projections By 2028, the market is expected to reach around $7.67 trillion, maintaining a robust growth trajectory.
The global unsecured loan market is anticipated to project robust growth in the forecast period due to easy application process, non-requirement of collateral and fast disbursement rate.
Loans are sums of money given by banks or other financial institutions with the expectation that the borrower would pay back the loan in full, plus a set amount of interest each month. Equated Monthly Instalment (EMI), which includes both principal and interest, is the name given to the monthly payment made to the bank or other financial institution.
Since unsecured loans are given out without any underlying collateral, they are frequently referred to as signature loans. A personal loan is obtained by more than half of borrowers (57.6%) to refinance credit cards or consolidate debt. Home renovations come in, at number two (5.8%). The borrower's credit score is often a factor in the terms and conditions of these loans, including the approval, sanction, and loan distribution. Certain unsecured loans require borrowers to have a high credit score to be approved. In some situations, if the borrower's credit score is insufficient, the lender may require a cosigner who will assume responsibility for paying the debt, should the borrower default on the loan.
In 2022, personal loan debt is higher than ever, in United States. The average balance per loan of unsecured personal loans held by Americans is $9,896, with a total balance amounting to $177.9 billion.
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Short Application Process of Unsecured Loans is Fueling the Market Growth
A secured loan application process can take a while. Financial institutions want to be certain that the businesses they lend to have the ability to make timely payments and eventually pay off their loans in full. They carefully review each application for a company loan, consequently. This is true for both secured and unsecured loans, as well as other forms of funding like business lines of credit, merchant cash advances, and invoice finance. However, the lender must thoroughly inspect any provided collateral in order to assess its value. This can require a lot of time. When compared to secured loans, the application and approval processes are quite simple and fast. Within a few days, the loan money is disbursed. Thus, the market for unsecured loan market is anticipated to develop at a faster rate than average during the anticipated period due to the rising demand for unsecured loans because of its quick loan application process.
Non-Requirement of Collateral Will Boost Market Growth
Many companies require collateral for taking a loan. A startup might not have any valuable company assets, for instance, to provide as collateral to lenders. The startup would therefore not be qualified for the majority of secured company loans. Other elements, such as business strategy and market potential, are considered while assessing a company. Startups and enterprises, without any assets, are eligible for unsecured business loans. As of the first quarter of 2022, 20.4 million Americans had personal loans, up from 19.9 million in the previous year. The number of borrowers has decreased from 20.8 million, at the end of 2019, despite the fact that personal loan debt is increasing. Any individual who lacks the necessary equity to secure the loan should choose an unsecured loan. This makes it possible for the person to borrow money for things other than just buying assets. This borrowing method allows borrowers to obtain quick cash that can be utilized to pay off due credit card balances or any other loans that need to be closed as soon as possible. As a result, the market for unsecured loan market is anticipated to rise due to the non-requirement of collateral.
Rising Supports from Chat bots Will Fuel The Market Growth
The market for personal loans has grown due to an increase in the adoption of advanced technologies like Chatbots, IoT, AI, and big data analytics. For instance, Zopa, Prosper and Lending Club are some of the Person-2-Person platforms for lending personal loans. It offers a credit card for online and offline purchases, a fixed-term savings account, and allows borrowers to access loans from a variety of lenders or investors. These firms enable customers to apply for loans in the comfort of their own homes. Additionally, as digitalization continues to grow, suppliers of unsecured loans look forward to making swift investments in customer interaction by offering digital and voice-activated assistants. Furthermore, Chatbots software programmes are used to conduct online chat conversations that are often employed by businesses providing unsecured loans because they provide more personalizedand user-friendly experiences for clients. Furthermore, more firms are developing creative unsecured loan schemes because of advancements in technology. As a result, there is no limit to the potential of technological development, which is anticipated to lead to profitable ventures for the expansion of the unsecured loans market.
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Market Segmentation
The Unsecured Loan Market is segmented based on type, provider type, interest rate and tenure. Based on type, the market is segmented into personal loan, education loan, credit card loan, agricultural loan, home improvement loan and others (short term business loan, consumer durable loan etc.). The market is further divided into bank, non-banking financial companies, others (fintech companies), based on provider type. On the basis of interest rate, the market is segmented into fixed and floating. Based on tenure, the market is fragmented into less than 3 years, 3-5 years, and more than 5 years. On the basis of region, the market is segmented into North America, Europe, Asia-Pacific, Middle East & Africa and South America.
Company Profiles
Bank of America Corporation, Citigroup, Inc., Wells Fargo & Co., U.S. Bancorp, PNC Financial Services Group, Inc., American Express Company, Ally Financial Inc., Truist Financial Corporation, Bank of China and HDFC Bank Ltd. are among the major market players in the global platform that lead the market growth of the global unsecured loan market.
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Attribute |
Details |
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Base Year |
2022 |
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Historical Years |
2018 – 2021 |
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Estimated Year |
2023 |
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Forecast Period |
2024 – 2028 |
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Quantitative Units |
Revenue in USD Billion and CAGR for 2018-2022 and 2023-2028 |
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Report Coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
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Segments Covered |
· Type · Provider Type · Interest Rate · Tenure · Region |
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Regional Scope |
North America, Europe, Asia-Pacific, Middle East & Africa and South America |
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Country Scope |
United States, Canada, Mexico, Germany, France, United Kingdom, Italy, Spain, China, India, Japan, South Korea, Australia, Saudi Arabia, UAE, South Africa, Turkey, Brazil; Argentina, Colombia |
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Key Companies Profiled |
Bank of America Corporation, Citigroup, Inc., Wells Fargo & Co., U.S. Bancorp, PNC Financial Services Group, Inc., American Express Company, Ally Financial Inc., Truist Financial Corporation, Bank of China and HDFC Bank Ltd. |
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Customization Scope |
10% free report customization with purchase. Addition or alteration to country, regional & segment scope. |
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Pricing and Purchase Options |
Avail of customized purchase options to meet your exact research needs. Explore purchase options |
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Delivery Format |
PDF and Excel through Email (We can also provide the editable version of the report in PPT/pdf format on special request) |
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