According to TransUnion customer’s auto loan delinquency rate declined up to 6% in the fourth quarter as compared to the year earlier. The 60-day delinquency rate on auto loans dropped to 0.81 percent. This is a positive sign for the economy and a pleasant relief for banks and lenders.

Delinquency in simple terms means failing to do what law or duty requires. The more number of people delaying their loan payments, the higher the delinquency rate and the higher number of repossession and the more number of bad debts. Thus, a fall in delinquency rate is a sign of relief for consumers, banks, lenders and economy as a whole.

There are many reasons for the improving trends in auto loan repayments. “Auto dealers are offering attractive and favorable deals for buyers of new cars. Government’s Cash for Clunkers program was also very effective. Addition to this, the growing awareness of loan modification has made people opt for it and make payments regularly, thus, improving the delinquency rate”.

Bookmark and Share

Advertisements