Recent news about the influx in student loans and auto loans brings much needed optimism about the recuperating economy in the U.S. The Wall Street Journal states that the borrowing of car loans, students loans among other types of financing increased by almost 10 percent in November, and a little over 9 percent in December–even when adjustments were made to account for holiday spending.
This change signals the largest surge since late 2001, when most auto manufacturers allowed only zero percent financing, immediately following the attacks that took place September 11.
This increase in auto loan and student loan borrowing leads many to believe that the economy is getting better. It shows that people are becoming more willing and financially secure to finance large purchases.
Many people stay informed about the news surrounding the current economy. In fact, many people use the current state of the economy as a guideline that helps them decide whether to make a large purchase.
Good Versus Bad Economy- And How it Affects Spending Habits
If the economy is good, than people are more apt to finance cars and take out student loans. When the economy is bad, people are less likely to take on large financial responsibilities.
The recent surge in car loans and the boost in auto sales helped to lift the economy’s yearly growth rate by 2.8 percent. And this was done in only three months.
This important data suggests that the U.S. is working on recovering from a state of oppression, and consumers are making large financial purchases that require taking out loans or financing items, which helps to boost the economy.
Better Deals on Car Loans
Part of the reason why people may be more apt to purchase a car is that many dealerships are offering low financing rates with no or very little money down. If you need a car, right now is the perfect time to buy because you’ll save money on interest. You are also more likely to qualify for a low monthly payment. However, this depends on how good your credit score is.
According to the U.S. Bureau of Labor Statistics, in October 2009 the unemployment rate was at 10 percent, which is the highest it’s been in 27 years. Since the job market is much more competitive than it was a few years prior, many people are interested in pursuing higher education.
People Want to Build Skills and Change Careers
And even though the unemployment rate is steadily climbing– as of January 2012, it was at 8.3 percent. Many people are interested in keeping up-to-date with the changing economy and employment opportunities available by adding more skills and qualifications to their resume, which increases their chances of finding employment and/or finding a job outside of their designated field.
Therefore, there’s reason to believe that the economy is slowly making a comeback. Who knows maybe other industries will also see a surge in consumer spending habits and the economy will soon be as it once was. Here’s to wishful thinking.