Americans seem to be regaining an appetite for auto loans and rentals, credit cards and personal loans, The Wall Street Journal (WSJ) reported.
Demand for these types of loans increased 39% year-over-year in April, and 11% from April 2019, the WSJ reported, citing statistics from Equifax.
The attitude is opposite to that of 2020, when consumers on the whole were not interested in credit cards or personal loans, either for lack of need due to stimulus checks or increased allowances. unemployment, or because of the good performance of the stock market according to the WSJ. Others simply did not want to spend the money due to the volatility and uncertainty of the economy amid the pandemic.
Everything started to change when vaccines were introduced, which helped the economy spur its recovery, the WSJ reported. Now Americans spend a lot on things like cars, vacations, and dining out. The market has also seen an increase in vehicle prices, which has increased the need for loans.
Meanwhile, lenders have signaled they are open to more consumer debt after banks tightened underwriting requirements at the start of the pandemic. Lenders also sent 127 million personal loan solicitations to individuals in May, an increase from $ 60 million the year before, the WSJ reported.
Consumer credit card debt fell to its lowest rates since 2017, PYMNTS reported, as borrowing fell in January. These numbers offset borrowing gains for categories such as auto loans and student loans.
The decline in borrowing in January showed total consumer credit fell 0.4% to $ 4.18 trillion.
“We expect growth in consumer credit (…) Nancy Vanden Houten, senior economist at Oxford Economics, said in March.