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Delinquency Rates Rise Across Most Loan Categories in 1Q: ABA

The delinquency rates on nine of the 11 different types of loan categories rose in the first quarter of 2018 compared with the fourth quarter of 2018, but an economist with the American Bankers Association categorized the increase as more of a return to normalcy following a prolonger period of below-average delinquencies.

The only categories in which the delinquency rate fell on a quarter-over-quarter basis were home equity lines of credit and non-card revolving loans. Every other category – direct auto loans, indirect auto loans, home equity loans, marine loans, mobile home loans, personal loans, property improvement loans, RV loans, and bank cards – saw an increase. In some cases, such as bank cards, mobile home loans, property improvement loans, and indirect auto loans, the increases were pretty significant.

“Delinquencies have been so low for so long that it is not surprising to see them ease back toward more normal levels,” said James Chessen, ABA’s chief economist, in a statement. “We are still well below the 15-year average, but consumers should always maintain a cautious approach to credit. More jobs and better wages continue to be the key factors in keeping delinquencies low, and the economic fundamentals remain positive. Solid budget management remains very important, particularly with higher electric bills to keep cool in the summer heat and rising gas prices.”

The delinquency rates for each category of loans were:

  • Direct auto loan delinquencies rose from 1.07% to 1.10%.
  • Indirect auto loan delinquencies rose from 1.78% to 1.93%.
  • Home equity loan delinquencies rose from 2.28% to 2.31%.
  • Marine loan delinquencies rose from 0.76% to 0.80%.
  • Mobile home delinquencies rose from 4.48% to 5.09%.
  • Personal loan delinquencies rose from 1.57% to 1.65%.
  • Property improvement loan delinquencies rose from 1.04% to 1.16%.
  • RV loan delinquencies rose from 0.73% to 0.78%.
  • Home equity lines of credit delinquencies fell from 1.16% to 1.14%.
  • Non-card revolving loan delinquencies fell from 1.62% to 1.56%.
  • Bank card delinquencies rose from 2.46% to 3.06%.

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