Consumers increasingly use personal loans for home improvements
Local banks are a surprisingly popular choice for personal loans
Credit card delinquency continues to defy gravity
A two-minute read
Consumers Increasingly Use Personal Loans for Home Improvement
Many consumers have adapted to the pandemic by investing more in their homes
This may account for the increased number of consumers using personal loan proceeds to pay for home improvements
A review of personal loan acquisition creative over the past several years shows a few attempts at home improvement positioning, however the vast majority of creative has focused on refinancing credit card debt
Local Banks are a Surprisingly Popular Choice for Consumer Loans
The personal loan product was rejuvenated in 2006 when LendingClub launched a technology-based platform to source and sell personal loans
The amount of attention since paid to it and its many “fintech” competitors, as well as online loan aggregators, would lead many to believe that local banks have missed the tremendous growth in the personal loan market over the past 10+ years
We were surprised when our personal loan survey revealed that most customers chose a “Bank with Local Branches” for their personal loan
Credit Card Delinquency Continues to Defy Gravity
Credit card delinquencies through the end of August continued their decline
This is notable due to multiple factors:
The early August end to supplemental unemployment payments
Continued high unemployment
The traditional seasonal upswing in delinquency rates
Drastically lower new customer acquisition
In the past six months, consumers have responsibly increased payment rates and avoided taking on much new debt, but the negative headwinds listed above are not going away any time soon
How this ends up is anyone’s guess, however as one lending executive recently told us, “Asset quality is too good. I feel like I could leave the office on Friday with everything doing well, then come in Monday to the end of the world”
Let’s hope not
Quick Takes
Credit Suisse reports that industry executives indicate student loan originations look to finish the summer season down 15% - 20% from last year, primarily due to COVID-related uncertainty
Online savings rates continue their decline
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