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Consumer Credit Rises; Interest Rates Dip, Federal Reserve Says

May 11, 2010

Consumer credit rebounded in March to an annual rate of 1 percent after it decreased in February to an annual rate of 3 percent, according to the Federal Reserve’s monthly report.

Non-revolving credit, which includes auto loans, rose at an annual rate of 4 percent in March and increased at an overall annual rate of 4 percent in the first quarter of this year. Revolving credit fell at an annual rate of 4.5 percent in March and dropped at an overall annual rate of 6.2 percent.

Interest rates on new-vehicle loans receded to 4.28 percent in March, a drop from 4.72 percent in February, but still higher than 3.94 percent in January. The average interest rate on new-vehicle loans was 4.31 percent in the first quarter.

Loan terms remained stable at 62.8 months in March, compared to 62.5 months in February and down from 63.5 months in January. The average loan term in the first quarter was 62.9 months.

The loan-to-value ratio on new-car loans dropped for the third-consecutive month to 88 percent in March, down from 89 percent in February and 90 percent in January. The average loan-to-value ratio in the first quarter was 89 percent.

Amount financed also fell for the third-consecutive month to $27,912 in March, down from $28,040 in February and $29,379 in January. The average amount financed in the first quarter was $28,444.

 

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