More loans for Subprime Consumers - Other News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » More loans for Subprime Consumers

More loans for Subprime Consumers

More loans for Subprime Consumers
The content is accurate at the time of publication and is subject to change.

Credit card, auto loans, and personal loans are trending in favor of subprime consumers according to the new TransUnion Industry Insights Report. It shows that these segments of the market all showed a year-over-year growth in subprime originations during the last quarter. This is a sign that lenders and once again willing to up the ante for consumers with subprime credit after several quarters in which they were giving out fewer loans to this segment of the market.

This trend is linked to fewer delinquencies according to TransUnion. “As we look across the consumer wallet, we find several noteworthy trends. As lenders continue to adjust strategies and monitor for risk, delinquencies have flattened and remained low. Conversely, origination growth is taking place most noticeably in subprime, but is also taking place across most risk tiers,” said Matt Komos, vice president of financial services and research and consulting at TransUnion.

“Overall, these insights point to a healthy market and should these trends continue, we can expect lenders to continue extending credit,” he added.

More credit cards, smaller limits

In the report, they discovered that there was an upswing in origination growth in the subprime risk tier. In both 2016 and 2017 there had been a decline in subprime originations for credit cards, but this year they are growing, and are up 3.6%.

When it comes to credit cards it appears that lenders are approving more high-risk consumers, and to offset the risk factors they are giving them lower credit limits.

That said the report also found that there was growth in prime plus and super prime risk tiers too.

Personal loans and auto loans are up too

When it came to personal loans subprime originations also experienced an upswing, growing by 28% in the second quarter of 2018, when compared to the same quarter in 2017. In fact, in the previous year, there had been a yearly decline of 7.1%.

The auto sector showed a similar trend, with lenders giving subprime consumers new loans, after a decline in both 2016 and 2017. In the report, auto loans to higher risk consumers were up 7.3%.

“In 2016, the market experienced a pullback as lenders slowed or stalled subprime originations. The pendulum is starting to swing back, as we see lenders once again extend credit to subprime consumers. In this environment, lenders are continuing to focus on risk tolerance and are taking this into consideration as some of them are shortening loan terms, managing interest rates and lowering loan amounts or credit lines,” added Komos.

The TransUnion Industry Insights Report takes a close look at credit trends in key sectors, including credit cards, personal loans, auto loans, and mortgage loans. This newest report gives insights on trends during the third quarter of 2018.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

More Credit Cards on the Market
More Credit Cards on the Market

Posted: December 31, 2018

TransUnion’s 2019 consumer credit forecast is out, showing that initiatives by credit card issuers to increase their reach have been a success, resulting in more consumers having a credit card in their wallet. Also, credit card balances… Continue reading

Freezing Your Credit for Free with the Transunion App
Freezing Your Credit for Free with the Transunion App

Posted: October 08, 2018

Freezing your credit report is now free, and it’s very easy to do with the release of a new app by Transunion, one of the three credit reporting bureaus.With this new app consumers can easily freeze their credit report in real time, and… Continue reading

Loan Default Rates are up
Loan Default Rates are up

Posted: January 22, 2019

The new S&P/Experian Consumer Credit Default Indices is out showing higher consumer default rates across all loan sectors this past December, with the overall rate increasing by 6%. When they looked at credit card default rates they went… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
The Citi Rewards+℠ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap.
For Excellent, Good Credit
Earn unlimited 1.5% cash rewards on all purchases.
For Good, Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!