The latest release from the Standard and Poor’s/Experian Consumer Credit Default index shows that more Americans are paying off their car loans at a higher rate than previous months.
The index tracks the rate of defaults, defined by lenders as balances that are unlikely to be collected, across categories like mortgages, bank cards and car loans. The companies gather data from more than 11,000 lending sources across the country totaling nearly $11 trillion in loans.
While August’s numbers showed that car loan defaults were on the rise, there was a small downturn in September, a good sign for consumers on the whole as the rate of defaults decreased from 2.1 percent to 2 percent. Mortgages and bank cards edged downward as well.
“The S&P/Experian Consumer Credit Default Indices are showing declining default rates at the national level for all categories, including auto loan defaults which had risen over the previous two months,” says Craig Feldman, Director at S&P Indices.
As fewer consumers default on their loans, lenders will generally have more confidence in bad credit auto loans. Interested buyers may want to fill out a bad credit car loan application online in order to determine what types of rates they qualify for.