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Personal loans continue to be a cheap option for people looking to consolidate debt, and they're still widely available to borrowers.
That's a bit of good news we can report now that there's data to show what happened to personal-loan borrowing earlier this year when online lenders began pulling back.
The verdict: The rate of personal-loan originations declined during the second three months of 2016 compared with the same period a year prior, but millions of people still took out loans, and total balances exceeded $100 billion for the first time, according to data from the credit bureau TransUnion.
"A real big driver of the growth has been from the fintechs," says Jason Laky, a TransUnion senior vice president. "As Lending Club, Prosper, Avant and others have made personal loans cool again, its not just benefited them, its benefited banks and credit unions and others in this segment."
Another factor in the popularity of personal loans is interest rates.
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In Bankrate's national survey of interest rates from banks and thrifts for Nov. 16, 2016, the rate on personal loans remained at its low point of the year for the second consecutive week, at 10.64 percent.
This week's average rate is down nearly three-quarters of a percentage point from its 2016 high. A year ago, interest on the average personal loan was 11.09 percent.
The average personal loan rate is well below what the typical credit card charges in interest, which makes the personal loan an attractive option for borrowers looking to ditch high payments.
Growth in online lending
Personal loan originations fell 0.5 percent during the second quarter to 3.57 million, according to TransUnion. But Laky says there's reason to believe the stalled growth was only temporary.
"Investor interest is still there, and there are still new, emerging and ongoing fintechs," Laky says.
TransUnion measures origination one quarter in arrears to account for reporting lag, so we don't yet know for certain what the July through September period looked like.