Americans Skip Millions of Loan Payments as Coronavirus Takes Economic Toll, Student Loans Top the Charts
The number of accounts that enrolled in deferment, forbearance or some other type of relief since March 1 and remain in such a state rose to 106 million at the end of May, triple the number at the end of April, according to credit-reporting firm TransUnion. TRU -0.86%
The largest increase occurred for student loans, with 79 million accounts in deferment or other relief status, up from 18 million a month earlier. Auto loans in some type of deferment doubled to 7.3 million accounts. Personal loans in deferment doubled to 1.3 million accounts.
….The stimulus package also allowed homeowners hurt by the coronavirus or its economic fallout to ask their mortgage servicers for permission to pause their payments for up to 12 months. If the mortgage is backed by the government, the mortgage servicer is generally supposed to grant the request.
In other types of lending, consumers are actively seeking help. Many credit-card, auto-loan and personal-loan lenders continue to allow consumers to skip or pause payments, in hopes of buying time for the economy to recover and for consumers to get back on track with their payments.
Capital One Financial Corp., COF -1.90% for example, has been working with customers who say they can’t pay their bills. The bank said earlier this month that about 2% of active card accounts were in forbearance at the end of May, up from 1% as of mid-April. Some 13% of its auto-loan accounts were in forbearance, up from 9%.
But lenders will shoulder the unpaid loans for only so long, and many are expecting delinquencies to soar later this year as the recession drags on.