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Lending to Continue to Expand in 2022; Here’s What to Expect by Category, According to TransUnion Forecast

CHICAGO–Continued expansion of lending, including to non-prime consumers, is expected to occur in 2022 with origination levels reaching or surpassing pre-pandemic levels, according to the newly released TransUnion Financial Services 2022 Consumer Credit Forecast.

“For auto loans and personal loans, consumers who are generally higher risk are accounting for a growing share of origination volume, with the forecast providing insights that explain why such broader lending will benefit the overall consumer credit market,” TransUnion stated.

TransUnion is reporting its forecast found that the auto, credit card and personal loan markets are expected to continue expanding into the non-prime segment of the market (comprised of the subprime and near prime risk tiers) as financial institutions recalibrate their growth strategies.

This expansion is happening as serious delinquency rates remain well below pre-pandemic levels, TransUnion added.

“During the height of the pandemic, many lenders pulled back and tightened underwriting to hedge risk in a period of great uncertainty,” Charlie Wise, head of global research and consulting at TransUnion, said in a statement released as part of the analysis. “Consumer performance, however, has continued to stay strong, which has restored lender confidence. The economy is normalizing and continues to expand, and those signs of renewed strength are encouraging lenders to not just focus on the least risky consumers, but to provide greater access to those persons that may be viewed as higher credit risks.”

The Effects from the Changes

According to TransUnion, changes in non-prime  Continue Reading

 

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