Fintechs Now Issue 42% of New Unsecured Personal Loans

TransUnion’s 2026 forecast shows that the story is not expansion itself, but how lenders will execute it. Both the forecast and fourth-quarter 2025 data show lenders growing with tighter underwriting and controlled exposure. Lenders are deploying capital selectively as delinquencies rise and consumer profiles change.

Jason Laky, TransUnion Executive Vice President and Head of Financial Services, said lenders are taking a “disciplined approach to profitable growth, using more data and services to better manage risk and fraud.” That framing defines the moment.

Fintech Share Signals Structural Change

In Q3 2025, an all-time high of 7.2 million new unsecured personal loan originations were created, with subprime lending driving much of that origination growth. Also, as of Q3 2025, fintech lender originations have grown to approximately 42% of all originations, compared to approximately 33% in Q3 2024.

This increase in fintech market share is raising an even tougher issue. Are fintechs increasing their market share because they are better able to assess and manage credit risk — or are banks withdrawing from the lower end of the credit spectrum?

Fintech lenders are assessing credit risk using alternative data (non-traditional data) and faster processing decisions to evaluate non-prime borrowers with tighter control processes. 

The median estimated annual percentage rate (APR) of new originations has increased to 21.3% year over year; this represents a shift toward a greater number of originations for riskier borrowers. The average dollar balance per consumer — near $11.7K — has stayed relatively constant.

Pricing will adjust. Exposures will stay contained.

Banks and credit unions now have a decision to make: compete through sharper segmentation, or let the growth of non-prime lending concentrate into alternative channels.

Normalization Comes With Pressure

Mortgage lending shows a similar pattern.

Mortgage originations were up 6.5% for the year in Q3 2025. In addition, rate-and-term refinancing grew more than 25% as interest rates declined. There is also available tappable home equity of $21.4 trillion that provides protection for each portfolio.

But delinquency has increased.

The 60-or-more-day unsecured personal loan delinquency was at 3.99% in Q4 2025. The credit card 90-or-more-day delinquency increased to 2.58%. Mortgage delinquency has been increasing year over year; but mortgage delinquency remains lower than before the pandemic.

Growth will continue, but performance pressure will increase.

Lenders need to use advanced tools, such as trended data, to evaluate changing risk profiles as the lending market moves back to historical lending trends, according to Michele Raneri, TransUnion Vice President and Head of U.S. Research and Consulting.

Risk Is Migrating, Not Disappearing

Another signal appears beneath the increase in loan volume.

Consumers are moving further away from mid-risk bands and toward the two extremes (higher and lower) risk bands. The median VantageScore decreased very slightly at year-end 2025 indicating some degree of distress within the lending population.

This type of movement fundamentally impacts portfolio structure. Loss curves will also change as a result of this movement. Lenders will need to adjust pricing models, line sizes, and approval requirements based on updated portfolio performance.

Risk is not being removed from the system; rather, it is being concentrated into a few areas.

That’s why, for lenders, the most important aspect of their business model is segmentation and not speed of expansion. Capital needs to be allocated to those areas of their portfolios where they can closely monitor performance and make quick adjustments if needed.

Demand remains high across all levels of risk. As a result, lenders are responding by issuing fewer dollars in initial loan lines; implementing additional fraud control measures; revising pricing models; and creating additional granularity in their risk-based tiered products.

The 2026 outlook does not describe a credit surge; it reflects risk-aware growth supported by analytics, controlled exposure, and data-driven decisions about products and markets.

As such, the industry is once again expanding — but only in areas supported by data.

TransUnion projects that credit card originations will rise only 2.0% in 2026 from a 9.0% increase in 2025. The company also projects that auto originations will drop by 1.5% due to tariffs that accelerated originations.

Expansion is returning, but only where underwriting precision and data discipline support it.