TransUnion Reports Subprime Borrowers Drive Lending Surge

Subprime borrowers drove unsecured personal loan originations and balances to record highs, TransUnion said in a Thursday (Feb. 19) press release.

Unsecured personal loan originations reached a record of 7.2 million in the third quarter of 2025, according to the release, which highlighted findings from TransUnion’s Q4 2025 Credit Industry Insights Report. The company views originations one quarter in arrears to account for reporting lag.

This growth was driven by subprime borrowers, a segment whose number of originations increased 32.5% year over year. The near-prime and super-prime segments each saw an increase of 21.5% over that period, according to the release.

Unsecured personal loan balances hit a record $276 billion in the fourth quarter, with 26.4 million consumers carrying a balance, per the release. Subprime borrowers drove the growth of this number with a 17% year-over-year increase.

“More Americans are turning to unsecured personal loans, and lenders are meeting that demand with stronger risk management,” Josh Turnbull, senior vice president, consumer lending business leader at TransUnion, said in the release. “FinTechs remain the most active issuers, and even at elevated growth levels, especially among non-prime borrowers, performance reflects disciplined underwriting and recalibrated risk strategies.”

New accounts originated in the first and second quarters of 2025 are going delinquent at a lower rate than in prior years, according to the release. That’s especially true in the subprime segment, per the release.

“Although account- and consumer-level delinquency increased year over year, balance-level performance held steady,” Turnbull said in the release. “Recent vintages also show newer subprime loans outperforming older cohorts, while super-prime performance has deteriorated slightly.”

When Enova International reported in November that subprime borrowers drove strong loan growth for the company in the third quarter, Enova CEO David Fisher said these borrowers, and all consumers, were managing their finances well.

Speaking during an Enova earnings call, Fisher said the company’s “subprime business has some of the best credit metrics we’ve seen in a long, long time.”

The PYMNTS Intelligence report “Subprime Borrowers Flock to Alternative Options Due to High Credit Card Denial Rate” found that subprime consumers are willing, and have been trying, to find new ways to improve their credit at a time when 29% of these consumers have applied for and been denied a credit card.