The COVID-19 pandemic profoundly impacted consumers and commerce. The crisis and resulting shutdowns drove unprecedented changes in borrowing trends. Today, understanding consumers’ financial and lifestyle changes is even more crucial for lenders. Leveraging multiple data types will enable lenders to re-engage the right consumers at the right times as optimism and economic growth fuels demand.
Consumer demand is recovering faster than expected
During the early days of the pandemic, similar to other loan types, unsecured personal loan (UPL) originations declined dramatically. Q2 2020 marked the first time since at least Q2 2018 without quarter-over-quarter growth in the number of consumers with a UPL balance. Similarly, Q2 2020 originations fell to their lowest point during the pandemic: 46% below the same quarter the prior year. However, the pullback is subsiding as the country starts to recover from the economic downturn.