US Unsecured Loan Balances Hit Record High

Demand from subprime customers drives 10% surge in unsecured loans to $276 billion

Published on Feb. 24, 2026

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According to a report from credit bureau TransUnion, robust demand from subprime customers led to a 10% surge in U.S. unsecured loan balances in 2025, reaching a new high of $276 billion. The number of consumers carrying these loans also increased from 24.5 million to 26.4 million over the same period.

Why it matters

The growth in unsecured loans, often used by lower-income consumers as a way to manage higher costs of living, raises concerns about the financial health of these borrowers and the potential for increased delinquency rates. It also highlights the credit industry's willingness to lend to riskier customers as interest rates have fallen.

The details

The increase in unsecured loans was driven by consumers consolidating credit card balances into these loans as interest rates declined. Credit card issuers have also expanded lending to lower-income consumers, though they have reduced initial credit limits to manage the risk. TransUnion forecasts slower growth in new credit extended this year, with a 5.7% rise in unsecured loans, 4% increase in mortgages, and 4.2% climb in home refinancings, while auto loans are expected to shrink 1.5%.

  • As of end-December 2025, the combined balances of unsecured loans reached a new high of $276 billion.
  • The number of consumers carrying these loans increased from 24.5 million in 2024 to 26.4 million in 2025.

The players

TransUnion

A credit bureau that provides the Credit Industry Insights Report, which revealed the growth in U.S. unsecured loan balances.

Michele Raneri

Vice president and head of U.S. research and consulting at TransUnion.

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What they’re saying

“As interest rates began to fall, many consumers are consolidating their credit card balances into unsecured loans.”

— Michele Raneri, Vice president and head of U.S. research and consulting

“Lower-income consumers are also using these loans as a stopgap measure to deal with higher costs of living that have not been followed by similar raises in wages.”

— Michele Raneri, Vice president and head of U.S. research and consulting

What’s next

TransUnion forecasts a 5.7% rise in new unsecured loans in 2026, as well as a 4% rise in mortgages and 4.2% climb in home refinancings, while auto loans are expected to shrink 1.5%.

The takeaway

The growth in unsecured loans, particularly among subprime borrowers, highlights the financial challenges faced by lower-income consumers and the credit industry's willingness to lend to riskier customers. This trend raises concerns about the potential for increased delinquency rates and the overall financial health of these borrowers.