States Where Personal Loans Are Most Popular: A 2025–2026 Data Snapshot
In Mississippi, more than half of consumers hold a personal loan. In Massachusetts, barely a quarter do. We ranked all 50 states — and found borrowing tracks income more tightly than geography.
Personal loans have become one of the fastest-growing consumer credit products in the United States. Roughly 38% of U.S. consumers now hold one — nearly as many as have a mortgage — and total balances reached a record $597.6 billion in 2025 (Experian).
But "most popular" is a slippery phrase, and most rankings never define it. So we start by saying exactly what we mean.
How we define "popular" Our primary measure is penetration: the share of consumers in a state who have at least one personal loan on their credit report. This counts people, not dollars, so a state isn't ranked highly just because a few residents carry large loans. We then layer in two secondary lenses — how large the average balance is, and how fast balances are growing. All figures are for September 2025 unless labeled as a 2026 outlook.
Our Methodology — And Why It Differs From Most Coverage
Most personal loan "rankings" pick a single number — almost always average balance in dollars — and present it as the definitive answer. That's misleading, because a high average balance can reflect a few borrowers holding large loans rather than widespread borrowing. As you'll see below, the states with the biggest balances are not the states where the most people borrow.
Our approach is different in three deliberate ways:
Our headline ranking is the share of consumers who actually hold a personal loan (Experian, all-lender credit-file data) — the truest reading of "popular." Balance and growth are reported separately, never blended into one score.
We paired Experian's state penetration data with U.S. Census median household income and computed the relationship ourselves. That result is original to this article, not lifted from another study.
Older articles claim the Northeast leads. That's true for one metric (new-loan size) and false for another (penetration). We show both and explain why they diverge.
Everything marked 2025 is actual reported data. Anything about 2026 is explicitly an outlook.
We did not run a proprietary consumer survey or model future balances. Source data comes from Experian and the U.S. Census Bureau, both linked below. Our original contribution is the analysis — the penetration-first framing and the income correlation we computed — not the raw collection.
How We Measure "Popularity"
There is no single official ranking of personal loan popularity, so we use three complementary lenses:
- Highest average balances — where residents carry the most personal loan debt per borrower (Experian).
- Fastest-growing balances — where demand is accelerating most sharply year-over-year (Experian).
- Everyday reliance — where residents most often request a personal loan just to cover routine bills (LendingTree).
A state can rank high on one measure and low on another, and that contrast is often the most interesting local story.
Where the Most People Actually Borrow
By the share of consumers holding a personal loan, the leaders are unmistakably in the South. Experian's own analysis notes Southern states show the highest uptake, while New England shows the lowest. In Mississippi, a majority of consumers carry a personal loan.
States that stood out with the largest average balances included:
| State | Share with a loan | Median income |
|---|---|---|
| Mississippi | 53.5% | $54,203 |
| Alabama | 50.1% | $62,212 |
| Louisiana | 48.4% | $57,852 |
| New Mexico | 48.2% | $62,268 |
| Wyoming | 47.7% | $74,649 |
| Oklahoma | 47.4% | $63,603 |
| South Carolina | 46.8% | $67,804 |
| Texas | 46.2% | $75,780 |
| Arkansas | 45.9% | $58,700 |
| Tennessee | 45.6% | $67,631 |
Source: Experian, Sept 2025 (penetration); U.S. Census Bureau, 2023 ACS (income).
Lowest penetration — concentrated in the wealthy Northeast: Massachusetts (27.1%), New Jersey (27.4%), Connecticut (28.3%), New York (28.3%), Rhode Island (29.9%).
Local story: For a Mississippi, Alabama, or Louisiana outlet, the hook writes itself — a majority of neighbors hold a personal loan, the highest rates in the country. For Massachusetts or New Jersey, the mirror image applies.
Our Analysis: Personal Loans Track Income — Inversely
The high-penetration states are lower-income; the low-penetration states are wealthy. To test whether that's real, we paired all 50 states' penetration rates with Census median household income and computed the correlation.
- Pearson r = −0.76 (p < 0.001) — a strong negative relationship
- R² = 0.58 — income alone explains 58% of the state-to-state variation in penetration
- Spearman ρ = −0.75
Average penetration by income quartile:
| Income quartile | Avg. penetration |
|---|---|
| Lowest-income 25% | 45.5% |
| Lower-middle | 40.9% |
| Upper-middle | 37.8% |
| Highest-income 25% | 34.5% |
Biggest Balances — A Different Map Entirely
Measure popularity by the size of the average balance instead, and the leaderboard flips to the Pacific Northwest and rural West. Washington's average balance is nearly $28,700 — but only 34% of Washingtonians hold a loan, below the national average. Big loans, fewer borrowers.
| State | Avg. balance | Share with a loan |
|---|---|---|
| Washington | $28,715 | 34.0% |
| Montana | $28,132 | 43.8% |
| Oregon | $26,884 | 35.3% |
| Arizona | $22,316 | 39.6% |
| Arkansas | $21,874 | 45.9% |
| Alaska | $21,429 | 40.6% |
| Nevada | $21,374 | 40.2% |
| New Hampshire | $21,058 | 35.1% |
| Florida | $20,407 | 36.6% |
| Kansas | $20,012 | 37.6% |
Source: Experian, Sept 2025. National average balance: $19,333.
A note on conflicting rankings: Older articles name New Jersey, Massachusetts, or Connecticut as leaders. Those used a third metric — the size of a brand-new loan (Massachusetts led at ~$12,572 in mid-2025) — and often cited 2022 data. That answers "who opens the biggest new loans," not "where do the most people borrow." By penetration, those same states rank at the very bottom.
Fastest-Growing Balances
Experian flagged six states where average balances jumped more than 5% in a single year — roughly triple the national rate of 1.7%.
| State | 2024 | 2025 | Growth |
|---|---|---|---|
| Connecticut | $16,708 | $18,128 | +8.5% |
| Virginia | $17,182 | $18,353 | +6.8% |
| Maryland | $17,677 | $18,849 | +6.6% |
| Delaware | $18,470 | $19,632 | +6.3% |
| Alabama | $16,824 | $17,793 | +5.8% |
| New Hampshire | $19,997 | $21,058 | +5.3% |
Source: Experian, September of each year.
Local story: Experian notes many Maryland residents work or have worked in the public sector and may face more economic disruption than consumers elsewhere. Connecticut's +8.5% is the largest single-year jump in the country.
Who's Borrowing, and Why
- The reason: Debt consolidation is the top driver — about 31% of loan requests — as borrowers refinance credit-card balances (averaging over 22% APR) into fixed-rate personal loans (Experian).
- Who: Usage peaks in middle age — 46.5% of Gen X and 45.4% of millennials, versus 38% of all consumers.
- Credit mix: Subprime and near-prime borrowers together account for roughly half of outstanding balances, and FinTech lenders now originate a large and rising share of new loans (TransUnion).
Why the Numbers Vary: State Regulation Matters
Personal lending is regulated at the state level. States such as Illinois and New York enforce stricter consumer-finance laws and rate caps, which shield residents from the riskiest loans and suppress high-balance subprime borrowing. So a state can look "less popular" partly because its legal environment channels demand elsewhere — these maps reflect policy as much as need.
2026 Outlook (Projection, Not Reported Data)
Forward-looking; read as outlook, not fact. Experian expects demand to keep climbing in 2026, driven by Federal Reserve rate cuts that make refinancing more attractive and insurance-premium shocks pushing households toward emergency borrowing. In a January 2026 Experian survey, 42% of consumers said recent economic conditions made them more likely to take out a personal loan this year.
Quick Reference: Is Your State in the Story?
| Measure | States featured |
|---|---|
| Most people borrow (penetration) | MS, AL, LA, NM, WY, OK, SC, TX, AR, TN |
| Fewest borrow (penetration) | MA, NJ, CT, NY, RI |
| Biggest balances | WA, MT, OR, AZ, AR, AK, NV, NH, FL, KS |
| Fastest growth | CT, VA, MD, DE, AL, NH |
Alabama and Arkansas appear on multiple lists — strong standout-feature candidates.
Sources
- Experian — "Personal Loan Use Reaches New High" (Feb 2026), state penetration table: https://www.experian.com/blogs/ask-experian/personal-loan-usage-statistics/
- Experian — "Average Personal Loan Balance Grows 1.7% in 2025" (Mar 2026): https://www.experian.com/blogs/ask-experian/research/personal-loan-study/
- U.S. Census Bureau — Median household income by state, 2023 ACS (Table B19013): https://data.census.gov/
- TransUnion — Q2 2025 Credit Industry Insights Report: https://newsroom.transunion.com/q2-2025-ciir/
- Bankguider analysis — Income-vs-penetration correlation across all 50 states (Pearson r = −0.76, R² = 0.58).
Data reflect September 2025 (loan metrics) and 2023 ACS (income) unless noted; the 2026 section is a labeled projection. Correlation does not establish causation. Informational only; not financial advice.
