Personal loans have become one of the fastest-growing segments of the American economy, earning $5.2 billion in 2017, according to Experian, the consumer data firm.
That is a 6.6 percent growth rate over the past year.
The growth is even higher when you factor in the growth in personal loans.
The average annual rate of personal loans increased to $7,865 in 2017.
Thats a 30.6% increase over the previous year.
Wells Fargo CEO Mark King said the company is excited about the growth, noting that personal loans were “the most important and fastest-expanding segment of the loan market.”
The average credit score for borrowers in the personal loans segment increased to 620, up from 610 in 2016.
The personal loans market is expected to continue to grow as the cost of loans falls, King said.
Personal loans account for about a third of all personal loans in the U.S., up from less than half a percent in the past.
King expects the average credit rating of a borrower in the loans segment will be upgraded from AAA to AA+ in 2019.
“As the cost to finance our borrowers declines, so does our ability to offer credit at a fair value,” King said in a statement.
Experian says that the personal loan market grew by 2.9 million consumers and 10.5 million business loans in 2017 and 2018.
King said Experian expects the personal lenders market to be worth $4.4 trillion by 2022.
“The market is about to get even bigger,” King added.