\n<\/p>\n
The third quarter of 2022 brought a continued exploration of the \u201cnew normal\u201d following the pandemic, fear of the looming recession<\/a> and an increase in household debt. Most notably, auto loan debt hit $1.52 billion, which makes up for more than 9 percent of all household debt. On top of that, delinquencies have increased<\/a> to near pre-pandemic levels according to Experian\u2019s<\/a> third quarter report, with 60-day delinquencies for new car loans sitting at 0.48 percent and used car loans at 1.17 percent.<\/p>\n An unfortunate mixture of factors has created this increase in auto loan debt. One is remaining supply chain issues leaving record-high vehicle prices. Second are steep interest rates<\/a> across the board for borrowers. This is especially true for those with bad credit<\/a> who hold a higher likelihood of falling behind or missing a payment.<\/p>\n One cause of the increase in auto loan debt over the recent years has been fewer cars available, explains Bankrate Chief Financial Analyst Greg McBride, CFA.<\/p>\n \u201cThe shortage of new vehicles created a scarcity that pushed prices higher, and this bled over into used vehicles as more car buyers moved in that direction,\u201d McBride says. And while this trend has been building, \u201cthere was an explosion in prices paid and loan balances financed once the pandemic hit.\u201d<\/p>\n McBride furthers this point by explaining that there is no better place to see households living paycheck to paycheck than in the driveway. Drivers have been met with high vehicle prices due to supply chain issues which in turn has led to budget-busting payments.<\/p>\n The state of the economy directly impacts drivers\u2019 ability to purchase, finance and pay off new or used cars in terms of cost and available interest rates. And with 43 percent of economists predicting that recession will continue to grow over the next 12 to 18 months, securing a vehicle<\/a> is just one expense that will cost more. But even if drivers can afford<\/a> to finance a vehicle upfront, the high-interest rates make debt and delinquency a possible truth for many borrowers.<\/p>\n Simply, as the economy grapples with steep inflation rates, the Federal Reserve<\/a> has been working to quell the issue by increasing the benchmark rate. The benchmark rate, set to 4.25-4.5 percent in December. This rate informs how much banks can charge to lend money to other banks, which then affects interest rates for consumer products, like car loans. Even as relief came in the form of vehicle prices declining, high rates may increase the number of individuals falling behind on payments and into debt.<\/p>\n There is a challenging dichotomy between less expensive vehicles coupled with high rates<\/a>. But as optimistically shared in TransUnion\u2019s 2023 Consumer Credit Forecast<\/a>, serious auto loan delinquency rates are expected to modestly decline to 1.9 percent in 2023 from 1.95 percent in 2022.<\/p>\n While incurred debt can feel inescapable there are still concrete steps<\/a> you can take to get out of the hole that missed or late payments have created. Americans had an average balance of $96,371 in 2021 \u2014 so if you have fallen into deep debt, you aren\u2019t alone.<\/p>\n Consider the following tips when trying to get out of debt.<\/p>\n A debt consolidation loan is a form of refinancing<\/a> your debt. With it, you can save on interest and help you repay debt at a faster rate. To find the best debt consolidation loan compare<\/a> a few offers. As with any loan, apply for preapproval to lock in the best rate possible.<\/p>\n If you owe more than you have in your bank account it might be a good time to reexamine your budget<\/a>. To adjust the amount you spend, start by taking a look at how much you spend and what you\u2019re spending it on. Try and eliminate common cost items that you can remove or cut down. Any extra cash that comes up can be used to pay down your debt.<\/p>\n If you are at risk of falling behind on your auto loan, loan modification<\/a> is a way to change your current loan to better suit your financial situation. Different from refinancing<\/a>, this process is done with your current lender and will directly change your loan terms. Keep in mind that not every lender will be willing to modify a loan, and you may need to provide proof of your hardship.<\/p>\n<\/div>\n\n The third quarter of 2022 brought a continued exploration of the \u201cnew normal\u201d following the pandemic, fear of the looming recession and an increase in household debt. Most notably, auto loan debt hit $1.52 billion, which makes up for more than 9 percent of all household debt. On top of that, delinquencies have increased to …<\/p>\n","protected":false},"author":1,"featured_media":39439,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/39438"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=39438"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/39438\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/39439"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=39438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=39438"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=39438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\nDebt and delinquency statistics<\/h2>\n
\n
A scarcity of vehicles has pushed prices higher<\/h3>\n
\nHow the economy affects debt<\/h2>\n
\n
\nHow to get out of debt<\/h2>\n
Consider debt consolidation<\/h3>\n
Reassess your budget<\/h3>\n
Request loan modification<\/h3>\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"