The national rate of auto loan delinquency dropped again in the second quarter of 2011. This marks the seventh consecutive quarter that posted good results as reported by TransUnion, one of the three major credit bureaus. The decline in delinquencies – being 60 days or more past due on a loan payment – shows that drivers are paying their bills and better managing their credit and debts.
This is good for the nation as a whole, as low delinquency rates can encourage lenders to offer better interest rates to consumers. Auto loans are doing the best in the debt sector, while late and non-payments on mortgages and credit cards are at least ten times more frequent.
“Over the last seven quarters – on a year-to-year basis – we have seen delinquencies trend downward as consumers continue to pay down debt,” said Peter Turek, the automotive vice presidents of TransUnion’s financial services sector. “A consumer’s ability to repay is also helped by the recent low interest rates for new and used car loans, making purchase decisions and monthly payments affordable.”
Lenders are also more likely to be willing to approve auto loans, even if you have a poor credit score, because they are fixed and short-term. TransUnion projected that delinquency rates will remain low through the rest of 2011. Drivers who are looking to get a vehicle with a used car loan should consider applying now to take advantage of low interest rates.