Finance & Loans

American’s taking up debt is on the rise again

Since the last spike in record debt in 2007, Americans using debt for all kinds of financial and other activities are on the rise again. Just in the last quarter of 2013, more than $241 billion debt has been taken by Americans, according to some government reports. These debts include mortgages and Home Equity Lines of Credit (HELOC), student loans, auto loans, credit card uses and others. 30 something borrowers are the biggest group of users of debt and student loan being the highest debt segment for them followed by auto loans. Those who are over 60 appear to reduce their debt load more than any other age group.

Is it a sign of confidence in the economy that it is rebounding or something else? Experts are all over the map. Some say even with record use of debt, delinquencies especially mortgages are declining. Mortgage delinquencies stand at 3.9 percent at the end of 2013 and foreclosures are also on the decline. Bankruptcy filings appear to be levelling off. All are good signs of strengthening economy. However, there are other areas of the loan spectrum that are not so bright spots. Student loan defaults are at record 11.5 percent.