As consumers adjust their household budgets and living expenses to counter the effects of high inflation, recent findings show such rising economic costs are contributing to the increased balances for unsecured personal loans.
According to CUNA Mutual Group, credit union members are borrowing at record numbers, especially unsecured personal loans. In May of this year, credit union loan balances increased 14.6 percent, the fastest yearly rate since May 1995. Unsecured loan balances grew by 3 percent in the same period while other types of loan balances increased 2.3 percent, per the report.
Kenny Cooper, vice president of lending at Neighborhood Credit Union, said the cooperative experienced significant growth in unsecured loans year-over-year and foresaw that it would continue as consumers find solutions to negotiate rising costs.
“If a consumer is looking to take out unsecured debt, a credit union is the best option,” Cooper explained to Fox Business. “Not only do credit unions cap their interest rates . . . the personal relationship credit union members have with their credit unions can make it easier to secure loans. Credit unions tend to provide loans to those individuals who may have been underserved or overlooked by larger financial institutions.”
continue reading »