Are Personal Loans a Good Idea for High Earners? What the Data Says

Despite higher salaries, many six-figure households live with surprisingly thin financial cushions. The Federal Reserve reveals that only one in four families earning $100,000 or more feel confident they could cover three months of expenses with savings. That means the majority are vulnerable if income slows or costs spike.

The Consumer Financial Protection Bureau’s Economic Well-Being report echoes this reality: 12.1% of households with incomes above $125,000 struggled to pay bills in the last year. Rising costs for housing, childcare, and healthcare often offset higher wages, leaving even well-compensated families feeling squeezed.

This helps explain why personal loans are gaining traction in the higher-income segment. According to a recent study, high earners account for more than one-third of personal loan demand.

As of Q2 2025, the number of loans funded climbed to 5.4 million, up 18% year-over-year, marking the strongest growth on record, according to a TransUnion Consumer Lending report. Prime borrowers—those with credit scores above 721— are the main drivers of growth, representing 20.2% of all originations.

Here’s how prime borrowers—with a healthy credit history, strong incomes, and sound financial habits—are using personal loans, according to the latest data:

Borrowing power and loan size

High earners with excellent credit are more likely to qualify for larger loans than the average borrower. TransUnion data revealed that borrowers with scores above 721 have an average loan balance of $16,300 to $17,500 per consumer. This is over one-third higher than the average loan balance for all credit tiers: $11,700.

While the average loan duration lasts about 30 months, prime borrowers often extend their terms to 49 to 58 months, which helps them keep monthly payments low, even with a larger loan.

Debt levels and rates

TransUnion data also shows that borrowers with good and excellent credit are fueling most of the growth in personal loan originations and balances—signaling a shift in how higher-income households are managing debt. Instead of relying more heavily on revolving credit, many are turning to fixed-rate installment loans to gain predictability and control interest costs.

But what stands out is the potential cost advantage: prime borrowers typically secure APRs of 13% or lower, a significantly more favorable rate than the median APR of 21%, which applies to all borrowers. For high earners financing large balances, that difference can translate into thousands in savings over the life of a loan.

Usage trends

With the housing market sluggish and consumer debt at an all-time high, many are using personal loans to improve their financial situation without compromising their liquidity. People commonly use personal loans for debt consolidation, home improvements, and everyday expenses.

Predictable payments and fixed terms

Most personal loans have a fixed interest rate and a set repayment period. This installment structure differs from a credit card, where the interest rate can fluctuate and the monthly payment may vary.

A fixed-term loan allows you to budget effectively because you know exactly how much you will pay each month until the loan is paid off. This is a huge advantage, especially when credit card rates are higher than the typical personal loan rate.

Consolidation to save money

One of the most powerful uses for a personal loan is debt consolidation. Credit card APRs now average 21.16%, with many new offers ranging from 20% to nearly 28%.

Swapping high-interest revolving debt for a lower-rate installment loan not only frees up monthly cash flow but also reduces the total amount of interest you pay over time—a smart way to stay ahead financially, especially as living costs continue to rise.

FYI: BHG Financial offers large personal loans up to $250,000¹ with no collateral required and fixed, affordable payments with terms up to 10 years.^1,2

Strategic financing, not just emergency response

Finally, the usage data mentioned above suggests that high earners view financing as a strategic tool rather than a means of survival. They’re increasingly used for planned growth—funding major projects, investing in property, or covering education costs—making them part of long-term financial planning rather than a short-term fix.

Of course, no loan is risk-free. A personal loan only works in your favor if you have a clear plan to repay it and avoid slipping back into old habits. Unfortunately, TransUnion has noted that many consumers accumulate new credit card debt within 18 months, even after using a loan to pay down old accounts.

And while higher incomes provide more breathing room, they don’t eliminate risk: the Fed says delinquency rates among the highest-earning households are increasing faster than any other segment.

Rates are another factor. While prime borrowers often secure personal loans APRs of 13% or lower, that’s still a cost to weigh carefully. The key is to compare the loan’s rate with your existing debt to make sure you’re truly lowering expenses. Fixed-rate loans offer an added layer of protection, since your payments stay the same regardless of market swings.

BHG Financial offers personal loans that are designed to meet the needs of high-income borrowers.

• Unsecured: Our loans do not require any collateral.
• Fixed terms¹ & payments: We provide affordable fixed-rate loans with predictable payments, which makes managing your budget simpler.
• Fast funding: If approved, you can receive funds quickly, in as few as 5 days.³
• Loan amounts up to $250,000¹: We offer substantial loan amounts, much higher than many competitors, giving you the flexibility to make smart financial moves.

For six-figure earners, personal loans can be part of a long-term financial strategy to strengthen liquidity and financial resilience. The data shows they’re widely used, deliver positive results, and offer real advantages over credit cards and other forms of debt.

Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan offers in just seconds.³