How do loan delinquencies affect your business?

In today’s shifting consumer finance market, loan delinquency remains a significant concern for both lenders and borrowers alike. As economic conditions fluctuate and societal dynamics shift, understanding the intricacies of delinquency rates across various loan types and demographics is important for achieving success.

In this article, we delve into the current state of loan delinquencies in the United States, explore demographic variations, dissect economic drivers, analyze lender strategies for mitigating risk and spotlight innovative solutions like Payment Guard.

Trends across different loan types

In the past year, American consumers have been a steadfast driver of economic growth, bolstering the economy with unexpected resilience. Yet, amidst this robust consumer spending, a concerning trend has emerged: escalating levels of debt and delinquency.

Delinquency rates rose across most debt categories except student loans. Roughly 8.5% of credit card balances and 7.7% of auto loans shifted to delinquency annually. Mortgage delinquency rates saw a slight 0.2% increase, remaining historically low.1 Serious credit card delinquencies surged in all age groups, notably exceeding pre-pandemic levels among younger borrowers.

 

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