U.S. unsecured loan balances climbed to an all-time high last year, expanding 10% to $276 billion as demand from subprime borrowers and credit-card consolidation gained momentum, according to TransUnion’s Credit Industry Insights Report.
By the end of December, 26.4 million consumers held unsecured loans, up from 24.5 million a year earlier. The credit bureau highlighted two primary dynamics behind the rise: consumers transferring outstanding credit-card balances into unsecured loan products as interest rates eased, and lower-income households tapping loans to bridge the gap between rising living costs and comparatively stagnant wage growth.
"As interest rates began to fall, many consumers are consolidating their credit card balances into unsecured loans," said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. She added that lower-income consumers are also using these loans as a temporary measure to cope with higher expenses that have not been matched by similar increases in wages.
Credit-card lending to lower-income borrowers rose alongside the unsecured-loan surge. Total credit-card balances increased 4% last year to $1.15 trillion, the report said, though issuers have responded to elevated risk by reducing the initial credit limits extended to new cardholders. TransUnion also noted that delinquency rates have been creeping upward over recent quarters.
Looking ahead, TransUnion projects more moderate expansion in the volume of new credit. The bureau expects growth to drift back toward what it describes as more "normal" levels after the volatility that followed the pandemic.
Specifically, TransUnion forecasts a 5.7% rise in new unsecured loans in 2026, alongside a 4% increase in mortgage originations and a 4.2% uptick in home refinancings. "People that have recent mortgages taken with higher interest rates are starting to have access to refinancing and we expect that demand to grow," Raneri said.
Auto lending is the lone category where TransUnion anticipates a decline this year, projecting a 1.5% contraction after auto-loan balances increased by about 5% last year. The bureau attributed last year’s acceleration in auto lending in part to consumers bringing purchases forward to avoid the impact of import tariffs.
The findings sketch a credit environment where borrowing has expanded, particularly among more credit-vulnerable households, while lenders adjust underwriting and limits in response to rising delinquencies and shifting risk profiles.