|
|
Unsecured Loans - USProduct Type: Market Research ReportPublished by: Mintel International Group Ltd. Published: December 2005 Product Code: R560-1842 Description In a recent international survey, US consumers were the most likely to have “no spare cash”. This would suggest that Americans, more than any other nationality, are likely to need a loan when encountering an unexpected expense. In fact, when Americans in the same survey were asked how they spend the spare cash they do have, 37% said they use it to “pay off debts, credit cards and loans.” While it is unclear how much this lack of spare cash is due to spending or paying off previous loans, the fact remains that Americans are the most likely to need to borrow for future needs.
While it appears that the market for loans will increase, unsecured loans are not consumers’ only option. The interest rates on the credit cards may or may not be better than those on unsecured loans, but they may have other attractive rewards programs or other benefits. Home equity loans tend to have lower interest rates than unsecured loans (Bankrate cites a 7.99% APR average for a $30,000 loan in September 2005, while the Federal Reserve cites over 12% for a 24-month personal loan. Payday loans are also a popular option, with loans usually at $500 or less. In a 2001 survey of payday loan customers, 66% used the loans for unexpected expenses or temporary reduction in income. In this report, Mintel clearly identifies the principal external factors driving or curtailing growth in unsecured loans. Exclusive consumer research reveals consumer attitudes and behavior toward loans, broken down by demographic characteristics. Six years of specific sales data provide a factual and impartial presentation of the market as a whole. Table of Contents Introduction and AbbreviationsIntroduction Other relevant reports Definitions and scope of the report Abbreviations and terms Abbreviations Terms Executive Summary Market Drivers Consumers’ lack of extra cash drives the need for more Figure 1: Percentage of worldwide consumers with “No Spare Cash,” May 2005 Figure 2: U.S. personal saving rate as a percentage of disposable personal income, 1980-Q3 2005 Consumers’ lending options increase, compete with unsecured loan offers Figure 3: Estimated mail volume of U.S. loan acquisition and follow-up acquisition solicitation of all types other than credit cards, Q1 2003-Q3 2005 Credit cards Figure 4: Estimated mail volume of U.S. credit card acquisition and follow-up acqusition solicitation, Q1 2003-Q3 2005 Figure 5: Percentage of credit card solicitations with balance transfer offers, 2003-05 Home equity Figure 6: Home ownership rates, Q2 2005 vs. Q2 2004 Payday lenders fill the space with quick cash for consumers Figure 7: Average payday loan APRs by state regulatory environment, 2001 Increasing convenience impacts the usage rates of consumers Figure 8: Top twenty U.S. bank holding companies by number of branches, November 2004 Figure 9: Locations of major payday lenders, 2005 Credit unions’ increased accessibility and low rates are making them more competitive Figure 10: Personal loan rates by banks and credit unions, 2000-05 Interest rates are poised for an increase, meaning more debt service Figure 11: Personal interest payments and U.S. prime rate, 1999-2005 The need for debt consolidation could rise New bankruptcy laws will make it harder for borrowers to default Figure 12: Non-business bankruptcy filings, 1995-2004 The health insurance gap Figure 13: Uninsured Americans by family income, 2003 and 2004 Market Size and Trends Overall consumer borrowing Figure 14: Total U.S. Consumer non-real-estate loans outstanding, revolving vs nonrevolving, 2000-05 Estimated market size for unsecured loans Figure 15: Distribution of the debt of homeowners and renters, by loan type, 1990-2002 Figure 16: Dollars outstanding in personal unsecured nonrevolving loans, 2000-05 Figure 17: Total personal unsecured closed-end loan assets outstanding from all sources, 2000-05 Market Segmentation Income and wealth Figure 18: Percentage of U.S. households carrying debt, by household income percentile, 1998 and 2001 Figure 19: Median debt of U.S. households carrying debt, by household income percentile, 1998 and 2001 Figure 20: Percentage of U.S. households carrying debt, by net worth percentile, 1998 and 2001 Figure 21: Median debt of U.S. households carrying debt, by net worth percentile, 1998 and 2001 Age Figure 22: Percentage of U.S. households carrying debt, by age of head of household, 1998 and 2001 Figure 23: Median debt of U.S. households carrying debt, by age of head of household, 1998 and 2001 Work status Figure 24: Percentage of U.S. households carrying debt, by work status of head of household, 1998 and 2001 Figure 25: Median debt of U.S. households carrying debt, by work status of head of household, 1998 and 2001 Competitive Landscape Overview Holdings of non-mortgage debt, by type of organization Figure 26: non-mortgage debt, credit outstanding by type of financial organization holding, 2003 Full Service Banks Major banks, unsecured loan holdings Figure 27: Major banks, consumer unsecured loans outstanding at year end, 2002-04 Figure 28: Unsecured loan products of major banks, 2005 Major Bank Profiles Bank of America Citigroup HSBC Wells Fargo Credit Unions Overview Figure 29: Number of credit unions and number of credit union members in U.S., 1999-2004 Figure 30: Personal unsecured loans outstanding at credit unions that are CUNA members, 1995-2004 Figure 31: Unsecured loan products of major credit unions, 2005 Top Credit Unions Figure 32: Top 10 U.S. credit unions by number of members, 2004 Select Credit Union Profiles Navy Federal Credit Union BECU Payday Lenders Overview Figure 33: Snapshot of major U.S. payday lenders, 2005 Select profiles of payday lenders ACE Cash Express, Inc. Advance America Other Lenders American General Financial Services Capital One Advertising and Promotion Overview Overall marketing spending Figure 34: Top ten financial services companies by estimated advertising expenditures, 2003-04 Direct mail Figure 35: Unsecured loans estimated mail volume, January 2004-March 2005 Figure 36: Top unsecured loan mailers, 2004-2005 Online Figure 37: Online advertising spending by selected financial services companies, 2004 Individual companies Advance America Bank of America Capital One Citigroup HSBC Wells Fargo The Consumer Introduction Ownership of unsecured loans and related products Figure 38: Received a personal loan or payday loan in the past year, October 2005 Figure 39: Number of credit cards held, October 2005 Figure 40: Number of credit cards held, by age, October 2005 Motivation to get a personal loan Figure 41: Circumstances to consider a personal loan, by age, October 2005 Figure 42: Concern about having enough cash to pay expenses, by household income, October 2005 Figure 43: Concern about having enough cash to pay expenses, by marital status and household size, October 2005 Choosing an unsecured loan Figure 44: Importance of unsecured loan attributes, including loan attributes that are currently offered with credit cards, October 2005 Figure 45: Graph: Mean importance of unsecured loan attributes, by age of respondent, October 2005 Figure 46: Mean importance of unsecured loan attributes, by household income, October 2005 Figure 47: Mean importance of unsecured loan attributes, by education level of respondent, October 2005 Summary Future and Forecast Future trends Lending with a purpose Rewarding options Payday loans are here to stay Intergenerational lending Home equity lending will continue to grow at the expense of personal loans Private educational lending also on the rise Market forecast Overview Methodology Personal unsecured closed-end loan assets outstanding from all sources Figure 48: Forecast of total U.S. personal unsecured closed-end loan assets outstanding from all sources, at current and constant prices, 2005-10 Figure 49: Graph - Forecast of estimated total U.S. unsecured, nonrevolving personal loans at current prices, 2000-10 Figure 50: Forecast of total U.S. revolving non-real estate debt, 2000-08 Figure 51: Forecast of total U.S. nonrevolving non-real estate debt Figure 52: U.S. consumer non-real estate loans outstanding, 2000-08 Figure 53: Percentage change of U.S. consumer non-real estate loans outstanding, 2000-04 Appendix: Trade Associations Appendix: Research Methodology Consumer Research Datascension, Inc. and Harris Interactive Service Bureau Greenfield Online ICR Surveys EXCEL Simmons National Consumer Surveys Technometrica TechnoExpresssm Trade Research Informal trade research Formal trade research Desk & Internet Research Sources Definitions Forecasts Appendix: What is Mintel? Mintel Group Mintel Reports Mintel Premier Mintel GNPD Mintel Menu Insights Mintel Comperemedia Mintel Custom Solutions Appendix: Direct Mail Advertising Figure 54: Advance America payday advance direct mail advertisement, November 2005 Figure 55: Advance America payday advance direct mail advertisement, November 2005 Figure 56: CapitalOne personal loan direct mail advertisement, November 2005 Figure 57: Citibank personal loan direct mail advertisement, November 2005 Figure 58: HSBC personal loan direct mail advertisement, November 2005 Figure 59: Wells Fargo personal loan direct mail advertisement, November 2005 Figure 60: Financial 21Community Credit Union personal loan direct mail advertisement, November 2005 Figure 61: Keesler Federal Credit Union personal loan direct mail advertisement, November 2005 Figure 62: Nevada Federal Credit Union payday loan direct mail advertisement, November 2005 |
|
||||||||
MindBranch has been the leading provider of industry and investment research from more than 550 independent research firms since 1992. With over 90,000 market research reports, MindBranch is your trusted source of competitive business intelligence. |