Customers Across the U.S. Continue Their Efforts for Cutting Debt and Repair Their Finances
While our government is continuously trying to reduce its deficit, consumers sadly don’t have that luxury. Instead, we have endured all these bad times with a stern face and are continuously trying to set our personal loans and credit balances in order, which wouldn’t have been a problem before the times of the economic crisis.
Now, while what I am about to tell you might be hard to believe, it is true. With every effort that we as customers and personal loan holders do to try to get debt-free and to put our finances in check, we might very likely be delaying the economy’s recovery. Obviously, while the ideal solution to all the economy’s problems would be for everyone to become debt-free, that is not going to happen anytime soon. Thankfully though, with out constant push for regaining control of our finances we are at the same time setting the stage for the healthy and long recovery of our economy.
Every quarter, the Federal Reserve performs a series of studies and surveys to determine the savings’, expenses’ and debt trends and analyses those results thoroughly. For example, in the latest analyses of the Bank of New York, the financial entity found that the total amount of outstanding debt of consumers reached the outstanding number of $11.4 trillion. This amount, although still significant, marks a clear progress from the $12.7 trillion measured in the same quarter of 2008. Now, while progress might be a bit slow, it also means that consumers and personal loan holder all across the U.S. are steadily becoming debt-free.
On the same note, the number of U.S. consumers and personal loan holders with bankruptcy notations and bad credit history also decreased drastically compared to just over a year ago. As a result of this, other variables like mortgage foreclosures also dropped down. This is a clear indication that even though not fast, the economy going through a recovery process, displaying the first positive signs since the crisis of a few years ago. another clear sign of this is that debt repayments have also dramatically improved year over year.
One of the behaviours on the part of consumers and personal loan holders that affected banks and other financial institutions in a very negative way is that consumers started to get rid of their credit cards and of personal debt, leaving many of those financial institutions with a severe decline in their business. Now, with these renewed economy and the constant efforts of people to get their finances in order, both banks and lenders are seeing an increase in their business again, since a lot of consumers use personal loans and other types of financial tools to regain control of their finances.
But the story becomes completely different when it come to student loans. Consumers in the U.S., while faced with adversity due to the economic crisis, decided that the one place to increase their debt was to invest in education. Because of this, even during the crisis period, student loans increased by an impressive $303 billion, all the while in the same period all other types of debt dropped dramatically.
On what concerns personal loans, the amount of debt held by consumers decreased by almost $6,000 when compared to September of the year 2008, one of the most optimistic numbers since the financial crisis of a few years ago.