California’s Personal Loan Surge: How to Win in 2025’s Hottest Market

Personal loan demand in California isn’t just up! I’s breaking records. 

In 2025, balances and applications are surging, even as interest rates remain stubbornly high. But while the headlines scream about cost, the real opportunity is hiding in plain sight: borrowers with strong credit are still getting deals, and banks and credit unions are quietly competing for the best paper.

Why the Smart Money Is Flooding California’s Loan Market

Let’s cut through the noise. Yes, rates are up. Yes, delinquencies are a concern in some zip codes. But if you know how to loan money to the masses - profitably - this is your moment. 

Online lenders are booming, scooping up every credit profile from super-prime to deep subprime. They’re fast, flexible, and willing to take risks that traditional banks won’t touch.

What does this mean for you? 

If you’re a lender, investor, or entrepreneur, California is the proving ground for every model in consumer finance. The winners are those who adapt, underwrite with discipline, and move faster than the competition.

The Playbook: How to Compete and Win; Even When Rates Are High

• Segment Your Borrowers Ruthlessly: Don’t lump everyone together. Prime borrowers are still being courted by traditional banks and credit unions, often at better rates. But the real money? It’s in the underserved, the ones banks turn away.
• Speed Is Your Moat: Online lenders are winning because they can approve and fund loans in hours, not days. If you can’t match their speed, you’re invisible.
• Delinquency Isn’t Destiny: Yes, some areas are still struggling. But overall, delinquency rates are improving. Track your portfolio by region, product, and borrower type. Double down where performance is strong, and tighten up where it’s not.
• Partner Up: There are some amazing entrepreneurs in subprime lending! Reach out to them. You'll be totally surprised about how helpful our perceived competitors are. Attend an industry conference for proof. Don’t ignore strategic alliances, they can bring in funding, deal flow, and credibility.

Action Steps for California Lenders in 2025

• Audit Your Underwriting: Are you using the latest data sources? Are you tiering rates and terms by risk? If you’re still underwriting like it’s 2019, you’re leaving money on the table.
• Invest in Collections: With balances at all-time highs, even a small bump in recoveries means big gains. Don’t let your profits slip through the cracks.
• Leverage Tech - But Don’t Forget Compliance: California’s regulators are watching. Make sure your systems are bulletproof and your disclosures airtight.

Ready to Loan Money to the Masses?

For two decades, I’ve helped lenders, investors, and entrepreneurs build recession-proof lending businesses in the toughest markets. If you’re serious about competing in California—or anywhere else—grab my 500-page manual, How to Loan Money to the Masses for the real strategies, not the theory.

Want to see how the top operators are adapting in 2025? Browse the latest case studies and strategies on the blog.

This is your moment. The market is moving. Will you move with it? Or watch from the sidelines?

Jer Ayles

P.S. Don’t miss the next wave. Subscribe to the free bi-monthly newsletter for insider insights, actionable strategies, and the latest on California’s lending market.