dv01 Discussion: Consumer Credit Market Pulse — December 2025

dv01’s latest roundtable discussion brought together perspectives across research, capital markets, and lending, with a shared goal of understanding where performance is stabilizing, where stress is emerging, and how borrower behavior is shifting in today’s rate environment.

Across the session, a clear message emerged: the consumer remains resilient, but performance is increasingly shaped by segmentation, affordability pressures, and sensitivity to price.

Panelists:

• John Hecht, Managing Director of Equity Research and Specialty Finance, Jefferies

• Adam Panzer, Financial Sector Strategist, Jefferies

• Clarke Roberts, Senior Vice President & General Manager of Marketplace, LendingClub

• Kunal Shah, Vice President of Capital Markets Execution, Upgrade

• Vadim Verkhoglyad, Head of Research Publication, dv01

• Jonathan Warrick, Chief Operating Officer, dv01 — Moderator

A Consumer That’s Still Spending — But More Selectively

While aggregate spending remains healthy, the underlying drivers look different than in previous years. Wage growth — especially among early-career earners — continues to support consumption, but borrowers are showing greater intentionality in how they allocate cashflow.

Consolidation into fixed-payment personal loans remains strong, driven by consumers seeking relief from revolving debt with rising minimum payments. Borrowers are more focused on predictable amortization, comparing monthly affordability across terms, and gravitating toward products that offer clear economic benefit.

The overall picture: resilient demand, but with more disciplined borrowing behavior.

Credit Performance: Stabilizing at the Aggregate Level, Diverging Beneath the Surface

Credit performance across many consumer segments has displayed a welcome degree of stability late in the year. Delinquencies have leveled off, and impairment volatility has been lower than expected.

However, performance is far from uniform:

• Lower-income households face the most pressure, particularly in regions where insurance costs, utilities, or transportation expenses have climbed.

• Revolving credit shows the sharpest signs of strain, as minimum payments adjust upward and floating-rate exposure compounds household budgets.

• Installment loan performance is steadier, aided by the fixed structure of payments and continued borrower demand for consolidation.

The broader takeaway is that normalization is not synonymous with uniform recovery. Understanding dispersion — by borrower segment, vintage, product structure, and geography — is increasingly essential.

Originations: Strong Activity, With Emphasis on Price Discipline and Unit Economics

Originations remain healthy across the consumer lending ecosystem. Demand for refinancing high-rate revolving debt continues to be robust, and lenders are growing in a disciplined, capital-efficient way.

Institutions are prioritizing:

• predictable repayment behavior

• transparent pricing

• products that deliver clear value relative to rising card APRs

• tighter alignment between underwriting and funding cost

Funding markets are also evolving. Private credit, insurance-driven forward flows, and 4(a)(2) structures continue to shape the capital stack, providing flexibility for lenders while diversifying investor participation.

Macro Conditions: A Supportive Backdrop With Pockets of Risk

The macro environment remains broadly constructive. Wage growth, low unemployment, and moderating inflation continue to support household repayment capacity.

Still, several risks could shift the trajectory:

• Even modest labor market cooling could disproportionately affect lower-income borrowers.

• Persistently high APRs may test repayment endurance if income growth slows.

• Housing and auto affordability constraints continue to ripple into unsecured credit behavior.

Rather than a reversion to the anomalies of 2021–22, the industry appears to be settling into a “post-pandemic normal”: stable but more fragile in certain segments, and more sensitive to macro shifts.

What Market Participants Should Take Away

Across issuers, investors, and capital markets participants, several themes stand out:

• Performance dispersion is widening. Portfolio-level metrics increasingly mask meaningful variation.

• Recent vintages are healthier, but require recalibrated expectations and updated loss modeling.

• Funding mix diversification is accelerating, requiring better data and more detailed views of collateral quality.

• Loan-level transparency and infrastructure now determine speed, accuracy, and competitiveness, particularly as reporting demands intensify.

Talk to dv01 About Your Market Needs

A recording of the session is not available.
If you’d like to explore any of these themes further — whether you’re thinking about market trends, benchmark data, loan-level analysis, or modernizing your credit workflow — dv01 can help.

Our team works with issuers, investors, and whole-loan buyers across the consumer credit ecosystem to answer market questions and improve data infrastructure.

Contact us to discuss your needs or learn how dv01 can support your workflow.