VAN
NUYS, Calif., May 17, 2024
/PRNewswire/ -- As the cost of living increases throughout the
country and the Bureau of Labor Statistics reports inflation is
still elevated at over 3%, consumer spending has shown signs of
softening but has ultimately remained stable. According to
Rob Haworth, a senior investment
strategy director for U.S. Bank and Wealth Management, the
resulting upward trend in interest rates poses a potential
complication for the economy's momentum. If the Federal Reserve is
forced to keep interest rates higher for longer than anticipated,
consumer lending will continue to face headwinds as well.
One of the areas of consumer lending that has already seen a
significant decline is loan refinancing. The primary benefit of
refinancing is the ability to reduce the interest rate of an
existing loan. As a result of the current high interest rate
environment, potential refinance borrowers have encountered fewer
opportunities to secure lower rates. This is for example evidenced
by a notable decrease in auto refinances, which - according to
TransUnion's 2023 Auto Consumer Industry Insights Report - have
decreased by about 50% since the Federal Reserve started raising
interest rates.
For auto title loans, LoanMart is reporting that refinancing for
title loans serviced by the company started decreasing
significantly already in 2020. Specifically, the share of loan
payoffs made with proceeds from another loan decreased by 58% from
2019 to 2020, and has decreased even more since then. By the same
token, the share of newly originated loans serviced by LoanMart
that included a 3rd party payoff decreased by 53% from 2019 to
2020, and has not recovered since.
About LoanMart
LoanMart proudly offers informational
resources to consumers throughout the U.S., providing unparalleled
financial service to eligible borrowers. Learn more about loans
serviced by LoanMart online today by visiting
www.800loanmart.com.
Contact Information:
media@800loanmart.com
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SOURCE LoanMart