One way to find out who’s who in the U.S. lending landscape is to concentrate on the financial institutions, from banks and credit unions to mortgage and finance companies, that have the richest portfolios. These powerful entities are not just critical forces in the U.S. economy, but important to individuals, families, entrepreneurs, and current business owners across the country.
Thousands of financial institutions are doing a tremendous amount of lending, with the money being used for a wide variety of purposes. In addition to issuing loans, many of the lenders also provide an array of products, such as low-cost or free deposit (checking and savings) accounts and investment vehicles like certificates of deposits.
In fact, lending money is a primary way financial institutions earn revenue so they can not only offer affordable deposit accounts to their customers, but they can also turn a profit to satisfy their shareholders (unless they’re credit unions, which are not-for-profit businesses that reinvest the profits into the organization for their members’ benefit).
In general, financial institutions use their customer-deposited funds as one of their sources of capital with which to issue loans. All these loans generate money for the lender because fees and interest rates are tied to them. Therefore, not only does the lender get the money it loaned back when the client adheres to the payment schedule, but it also turns a profit — thus increasing its ability to make more and larger loans.
To determine the most powerful financial institutions in the lending sphere, consider those with the most consolidated assets. According to Federal Reserve data from December 2020, the top 25 are:
As you will see, some of these financial institutions specialize in loans for each of the lending categories below, while others are narrower in scope. The most common installment loan products for individuals are mortgages, auto loans, student loans, and consumer (personal) loans, while businesses take out commercial loans to finance their ventures, both as startup capital and for operations and growth.
Largest Mortgage Lenders in the U.S.
Most people rely on mortgages to make their first home purchase because home prices are typically out of reach for a cash-only transaction. To identify the mortgage that best suits their credit profile and financial circumstances, they typically scour the market options. They may go to the bank or credit union they already do business with or seek a loan from a financial institution that specifically deals with mortgages.
Whatever the case, homebuyers try to obtain the loan with the best terms, with a strong focus on the interest rate since it’s an important factor in how much the loan will ultimately cost.
Some financial institutions have become dominant in the mortgage lending space. The most recent numbers come from the Consumer Financial Protection Bureau (CFPB).
According to the CFPB’s Data Point: 2019 Mortgage Market Activity and Trends report released in 2020, the top 10 mortgage lenders for total loans issuances in the U.S. per year are:
Clearly, Quicken Loans issues the highest number of total mortgages, beating its closest competitor, United Wholesale Mortgage, by 202,000 loans.
Some lenders concentrate on initial home purchase loans, however, while others are on refinancing. According to the CFPB report, these are the top 10 mortgage lenders for home purchase loans (first mortgages):
Plenty of homeowners turn to loan refinancing to get a better interest rate or to elongate the term so the payments are more affordable. For refinancing, the lenders and numbers shift around yet again:
Largest Auto Lenders in the U.S.
As with homes, consumers tend to purchase personal cars and trucks by borrowing money from a financial institution. In the U.S., 85.5% of new vehicles purchased in 2020 were financed.
According to the trade publication Automotive News (February 12, 2020), the top-seven auto lenders by U.S. sales in 2019 are:
However, other financial institutions are in the auto lending field, and they don’t just include banks. Those with the highest market share are:
- Ally Financing
- Capital One
- Wells Fargo
- Bank of America
- U.S. Bank
- PNC Bank
- USAA FSB
- Fifth Third Bank
Next up are credit unions, which account for 21.3% of all auto loans. The largest credit unions that finance vehicles are:
- CU Direct (a network of 1,100 credit unions)
- Alliant Credit Union
- American Airlines Credit Union
- Coastal Credit Union
- San Diego County Credit Union
- Lake Michigan Credit Union
- Suncoast Credit Union
- Teachers Federal Credit Union
- Golden 1 Credit Union
- Security Service Federal Credit Union
- Navy Federal Credit Union
Captive lenders are yet another category. These financial companies are associated with the car manufacturer and are often used for preowned vehicle financing, accounting for 54.7% of the market share.
The top captive lenders are:
- Ford Credit
- Toyota Financial Services
- Nissan Motor Acceptance Corporation
- Honda Financial Services
- Chrysler Capital
- KIA Motors Finance
- Hyundai Motor Finance
- VW Credit
- GM Financial
- Subaru Motors Finance
And finally, the top finance companies that only exist to offer consumers auto loans are:
- RoadLoans by Santander Consumer USA
- Credit Acceptance
- World Omni Financial
- AmeriCredit Financial Services (GM Financial)
- Westlake Financial Services
- Exeter Finance
- Regional Acceptance
- American Credit Acceptance
- Flagship Credit Acceptance
- SunTrust (LightStream)
Largest Consumer Loan Lenders in the U.S.
Consumer loans are installment loan products, which means that they are provided to the person in a single lump sum (as opposed to a line of credit that can be drawn from and the balance changes based on usage). Installment loans are repaid in fixed monthly payments, and interest is built into the payments.
In addition to using these loans to purchase homes, vehicles, and to finance a higher education, consumers may also take out personal loans. The money from these loans can be used for pretty much anything from home furniture to vacations.
As per data collected by American Banker, the bank holding companies with the largest consumer loan portfolios as of Feb 8, 2021, are:
The number of loans a financial institution makes is just one way of quantifying lending power. Sales revenue is another, which is compiled by the business credit reporting company Dun & Bradstreet.
Using sales as the measure, here are the top consumer lending companies in the United States:
Largest Student Loan Lenders in the U.S.
Parents and students often depend on loans to pay for higher education. The average cost of a four-year college education in the U.S stands at $35,720 per year — and graduate school costs another $30,000 to $40,000 in annual tuition. Student loans may be federal or private, and many students obtain both during their higher education pursuits.
The largest student lender of federal student loans is the U.S. Department of Education. According to Sallie Mae, the Department of Education issues 92.29% of the country’s $1.6 trillion of student loans today.
In contrast, private student loans, which are made by a lender such as a bank, credit union, state agency, or a school, account for just 7.71% of student loans. The national banks that currently offer private student loans, in order from highest to lowest total assets:
- Wells Fargo – $1.9 trillion
- PNC Financial Services Group – $457.45 billion
- Citizens Bank – $183 billion
- Discover – 92.31 billion
National banks offer the span of services that consumers expect, but the consumer bank Sallie Mae has a single function to originate, service, and collect on student loans.
Sallie Mae owns 1.4% of student loans today. In the first quarter of 2020, its private education loan originations reached the sum of $2.3 billion. As of 2019, Sallie Mae’s assets were approximately $32.69 billion.
Other major financial institutions in the private student loan sector that only have an online presence are:
- College Ave
- Advantage Education Loan
Largest Commercial Loan Lenders in the U.S.
And then there’s business. Commercial loan lenders work with small, midsize, and large companies to provide them with capital to use as startup funds, for regular operations, unexpected costs, expansion, and to purchase property and inventory.
Small business owners may get SBA loans that are partially guaranteed by the U.S. government. Because the Small Business Administration reduces some of the risk that the financial institution takes on in lending the money, SBA loans can be easier to qualify for than business loans on the open market.
As of September 30, 2020, the top 25 most active SBA lenders in the United States are:
Most business owners use SBA loans to buy or renovate real estate or to invest in necessary equipment, though SBA loan money is also used as working capital, to make payroll, and to purchase inventory and supplies.
A whole other category of commercial loans is available for the purchase of real estate intended for business use. Hundreds of financial institutions provide these loans, but the top-20 bank holding companies with the largest commercial real estate loan portfolios are:
Businesses can look into other loan sources as well, including from all the major banks. The top-five conventional lenders are:
- Bank of America
- Wells Fargo
- US Bank
- TD Bank
The most prolific credit unions for business loans are:
- America First Credit Union
- Alliant Credit Union
- Navy Federal Credit Union
- First Tech Federal Credit Union
- Self-Help Credit Union
- Consumers Credit Union
- Digital Federal Credit Union
- Boeing Employees Credit Union
Finally, commercial loans are available from numerous non-traditional lenders, including:
- SBG Funding
Whether the financial institution is big or small, grants many or a few loans, all but one type of loan (federal student loans) take the person’s creditworthiness into consideration to determine qualification and set terms. After the person submits the application, the lender will analyze the applicant’s credit reports and credit scores. It will also review the applicant’s online form or paperwork that describes the person’s financial capability (income and debt) to repay the loan and, depending on the product, collateral, and assets.
For this reason, it is important for all applicants to check their creditworthiness before pursuing a loan and only apply for the one that is within their scope.
Once a loan is issued, it’s important to manage it responsibly. For an installment loan, all that means is sending payments on time, unlike credit cards and lines of credit, where credit utilization needs to be low and monitored. Because both consumer and business credit scores rank payment history as the most important factor, meeting those due dates month after month is essential to keeping credit scores high — and excellent loan options open.
Clearly, a tremendous number of lenders and loan types are on the market. Vast sums of money are there waiting for the right borrower to come along. It’s a mutually beneficial arrangement, after all!