Consumer Borrowing In Student And Auto Loans Is At An All Time High

New reports disclose consumers are borrowing more then ever before, which means getting a loan could be a bit easier.

Consumer borrowing reaches a record high this year... 3. 34 trillion us dollars. The Federal Reserve says a large portion of which are student and auto loans.

"I think consumers are borrowing more in student loans because the expense of education has risen and more people are going to seek out post secondary education. So, in case you add those 2 things together, you will definately get more borrowing happening," stated Neil Meredith, asst professor regarding economics from West Texas A&M University.

Amarillo National Bank stopped giving student loans years back, but they point out they've seen a rise in auto loans.

"We've viewed quick auto sales the last few months in particular, " said John T McElyea, Senior Vice President for Amarillo National Bank.

Within January this year, ANB financed 3, 200 autos and nearly 4, 000 in February.

"The average cost of an automobile is maximum its ever been and so higher prices of brand new vehicles typically will result in higher prices on used vehicles, so therefore a consumers may have to borrow more cash., " stated McElyea.

McElyea adds stating rates have been very low during the last several years. So, individuals can borrow more at the lower rate and still have a identical payment as they could with a greater interest rates 5 or 6 years back.

Meredith says so long as our consumers are usually borrowing responsibly it won't lead us to an alternative recession.

"If individuals are borrowing to go and obtain a bachelor's degree in economics after which they use that for getting themselves a more satisfactory job and they make a much better salary and they are able to then pay additional in taxes and the sorts of things, that's a net advantage for that economy, " stated Meredith

As long as individuals are observing good private finance roles along with how they finance their autos and go out an buy a auto they can afford, it may not really lead us to a recession.

Amarillo National Bank says the particular tax season is additionally a reason for the spike in loans... saying the more cash people get, the more they will expend.

Source: This atop story is based on materials provided by the NewsChannel 10 and image credit eCreditDaily.