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Installment Lending: Fintechs Gaining Ground on Loans Forecast at $212 Billion

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    Report

  • 28 Pages
  • March 2022
  • Region: United States
  • Mercator Advisory Group
  • ID: 5559776

FEATURED COMPANIES

  • Acima Credit
  • Bread
  • FICO
  • JPMorgan Chase
  • Opportun
  • TransUnion
The publisher has released a report on trends in installment lending titled Installment Lending: Fintechs Gaining Ground on Loans Forecast at $212 Billion. The research explains the state of consumer installment lending in the United States and how fintechs and finance companies now outpace banks and credit unions in installment loans. Furthermore, this research examines how companies are offering embedded finance products such as CCaaS to allow customers the ability to offer their own credit card product. By way of four evaluative criteria, general advice is provided for those seeking a relationship with a fintech provider.

“Banks used to dominate consumer lending, with installment lending products priced far lower than credit cards, but that is no longer the case,” comments Brian Riley, Director of the Credit practice at the publisher, and the author of the research report. “Buy Now, Pay Later (BNPL) was a wake-up call to credit card issuers. BNPL was a recast of a merchant finance model used long ago by companies like GECC (now Synchrony) and Household Finance Corporation (acquired by Capital One). Now, fintechs are moving in the same direction with installment loans,” Riley says.

Highlights of the research note include:

  • U.S. consumer debt trends
  • Fintech and finance company trends versus financial institutions
  • Why banks and credit unions should define the consumer lending space, not follow fintech trends
  • Strengths, weaknesses, opportunities, and threats for incumbent banks and fintechs
  • Comparison of revolving and installment lending products
  • Consumer survey data on installment loan users and major fintech lenders

FEATURED COMPANIES

  • Acima Credit
  • Bread
  • FICO
  • JPMorgan Chase
  • Opportun
  • TransUnion
Executive Summary

Introduction

Household Debt in the United States

Unsecured Installment Lending: Defining the Space

Reasons Why Consumers Opt for Non-Traditional Lenders

Installment Lending: Risks and Opportunities for Financial Institutions and Fintechs

What Financial Institutions Should Do

What Fintechs and Merchants Should Do

References

Figures & Tables
  • Figure 1: Consumer debt in the United States totals $15.6 trillion across all collateral classes
  • Figure 2: U.S. unsecured personal loans will grow to $212 billion by 2025
  • Figure 3: Fintechs and finance companies outpaced banks and credit unions for market share between 2016 and 2021
  • Figure 4: Consumer lending products range
  • from unsecured signature revolving and installment loans to secured lending
  • Figure 5: Almost a quarter of surveyed cardholders reported using an online lender
  • Figure 6: Top Seven Drivers of Installment Borrowing by Consumers with Credit Cards
  • Acima Credit
  • Affirm
  • American Express
  • Avant
  • Bankrate
  • Blend Labs
  • Bread
  • Capital One
  • Citi
  • Discover
  • Equifax
  • Experian
  • FIS Global
  • FICO
  • Fiserv
  • GECC
  • HFC
  • JPMorgan Chase
  • Jack Henry
  • Klarna
  • Lending Club
  • LightStream
  • Mastercard
  • NerdWallet
  • Opportun
  • Prosper
  • Regions Bank
  • Rocket Companies
  • SoFi
  • Synchrony
  • TSYS
  • Truist
  • TransUnion
  • Upgrade
  • Upstart
  • Visa
  • Wells Fargo
  • Worldpay
  • Zopa