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Subprime auto loan delinquencies surge. According to Experian, borrowers with a FICO score between 501 and 600 fall under the subprime category. ... The higher delinquency rates among subprime ...
Under a typical subprime mortgage made during the housing boom, a $500,000 loan at a 5.5% interest rate for 30 years results in a monthly principal and interest payment of approximately $2,839.43. In contrast, the same loan at 8.5%, under a typical 3% adjustment cap for 27 years (after the adjustable period ends), results in a payment of about ...
Experian reports that as of the second quarter of 2024, the average subprime auto loan rate for new vehicles was 13.18%, compared to the average 6.87% prime loan rate for borrowers with good credit.
For example, a customer could refinance $10,000 worth of auto loan debt at 7 percent interest into a home equity loan at 18 percent interest. Because the auto loan would have to be paid off in 5 years while the home equity loan would have a 20-year repayment plan, the required monthly payments for the customer would be lower even though the ...
On December 12, 2019 NPR aired a segment of Morning Edition called "The Big Business Of Subprime Auto Loans", by Anjali Kamat, which described "the murky world of subprime auto finance," and called it "eerily similar to the subprime mortgage lending that touched off the last financial crisis."
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