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While delinquencies down, debt consolidation may help those still in debt trouble
By Edith Barlow on Apr 9th, 2010
One reason why consumers may consider debt consolidation is because they are having problems trying to pay off debt.
However, a report from the American Bankers Association shows that the fourth quarter of 2009 saw an improvement in the number of loans that were considered delinquents. Of all accounts, 3.19 percent were late on payment by 30 days or more, compared to the 3.23 percent rate seen in the third quarter.
"People are actively reducing their level of debt relative to their income and are rebuilding their savings," said James Chessen, ABA chief economist.
The number of bank card delinquencies also declined in 2009's final quarter, falling 38 basis points to 4.39 percent of all accounts. However, delinquencies on home loans reached never-before-seen levels at 4.32 percent of all loans.
Consumers who are having problems paying off their mortgage debt might consider debt consolidation. With debt consolidation, people may reduce the amount of interest they pay on credit card debt, which could lead to them having more money for home loan payments.
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