Three Things We’re Hearing
- Personal loan rates are in flux
- Student lending is approaching peak season with a big question
- Consumer delinquencies continue at lower than expected rates
Today’s newsletter takes 2 minutes to read
Personal Loan Rates are in Flux
- Personal loan originations in April were roughly half the level of early March 2020 and 62% below April 2019 originations
- However, recent securitization activity has brought a number of fintechs back to the aggregator and origination markets, with personal loan pricing fluctuating in both directions
Student Lending Still in Limbo
- Competition for in school student loans has increased in each of the past three years
- While early 2020 mail volume is down, previous year trends would indicate that competition is likely to heat up - 2019 volume overall was 33% higher than 2018, driven largely by increased volume from Discover (+26%) and College Ave (+90%v
- January through April 2020 mail volume is down 18% vs. 2019, likely impacted by the pandemic
- However, online search volume for “Private Student Loans” has been running higher than last year, possibly due to stress on families’ finances due to the pandemic, increasing loan demand
- The pandemic continues to provide uncertainty; however, recent announcements from colleges have continued to trend towards students being on campus this fall
- Many families are likely waiting longer to make their final decisions on loans
Payments
- We continue to hear that consumer loan asset quality is holding up better than would be expected in the current economic environment
- This chart from Equifax shows credit card delinquency actually down since early March
- One factor explaining this is the data below showing that personal income has actually risen since February due to stimulus measures and unemployment benefits
Going Forward
- Lending markets continue to slowly reopen
- Post forbearance asset quality remains a wild card
Thank you for reading.
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Jim Stewart
www.epicresearch.net
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