The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Just 1.51% of all consumer installment loans — like personal loans and auto loans — were 30 or more days past due in the third quarter of 2014, a record-low delinquency rate, according to a report from the American Bankers Association. The 15-year average delinquency rate is 2.3%, and delinquencies hovered above 3% at the height of the recession.
The American Bankers Association (ABA) tracks eight installment loan categories for these figures, which it released Jan. 8: personal loans, direct auto loans, indirect auto loans, mobile home loans, recreational vehicle (RV) loans, marine loans and property improvement loans. Delinquency rates fell among all those categories except direct auto loans (steady at 0.72%) and mobile homes, up from 3.56% to 3.64% from the second quarter to the third. The report doesn’t include student loan delinquencies or mortgage delinquencies, because the report focuses on loans with shorter repayment periods. Student loans and mortgages are special beasts, as far as consumer borrowing goes.
ABA also tracks three revolving credit categories, including credit cards, home equity lines of credit (HELOCs) and non-card revolving loans. The credit card delinquency rate went up from 2.43% in the second quarter to 2.51% in the third quarter, and the HELOC delinquency rate increased slightly from 1.5% to 1.52%. According to the ABA, the credit card delinquency rate has stayed within 14 basis points since the fourth quarter of 2012.
“Bank card delinquencies have hovered near 15-year lows with only minor fluctuations over the past two years, and we expect that trend to continue,” said ABA Chief Economist James Chessen, as quoted in a news release from the association. “While people are clearly ready to spend again as economic activity picks up, the overwhelming majority of consumers continue to keep debt at manageable levels.”
While lower delinquency rates is certainly good news, it’s crucial to pay attention to those consumers still struggling to make loan and credit card payments, because delinquency is the gateway to larger financial issues like default, debt collection and bankruptcy. Consumers struggling to repay their creditors should first evaluate their individual financial situations to see if budget changes could make payments affordable, then consult their creditors to see if any modifications to loan payments can be made. If not, it’s worth exploring debt consolidation or the help of a credit counseling agency.
Loan delinquency can wreck your credit, in turn making it more difficult to qualify for loan consolidation and other forms of credit you may need later. You can see how much of an impact it could have by getting a free credit report summary on Credit.com each month, and if it identifies payment history as an area of concern, make sure you act quickly to prevent the problem from worsening and threatening your financial future.
Image: Fuse
May 30, 2023
Managing Debt
September 7, 2021
Managing Debt
December 23, 2020
Managing Debt