Americans’ debt rose $ 313 billion in the second quarter – here’s how you can help pay off yours
Household debt rose $ 313 billion in the second quarter of 2021, up 2.1% from the first quarter, according to a report from the Center for Microeconomic Data at the Federal Reserve Bank of New York. This brought total US household debt to $ 14.96 trillion.
The new household debt balance rose $ 812 billion from the end of 2019, the New York Fed’s Quarterly Household Debt and Credit Report showed. The 2.1% increase in the second quarter was the largest since the fourth quarter of 2013 and, measured by volume, the peak of $ 313 billion was the largest since the second quarter of 2007.
If you are one of those Americans looking to pay off their debt, there are several options that can help. An example is taking out a personal loan when interest rates are at their lowest. Visit Credible to find your rate on a personal loan without affecting your credit score.
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The increase in debt was driven by a slight increase in mortgage balances – the largest component of household debt, according to the report. Mortgage debt rose $ 282 billion in the second quarter, to a total of $ 10.44 billion at the end of June.
By comparison, credit card balances also rose – increasing $ 17 billion in the second quarter – but remained $ 140 billion below 2019 levels, according to data from the New York Fed. Auto loans were also up, increasing by $ 33 billion, but student loans offset part of the overall increase with a decline of $ 14 billion. All other debts increased by $ 44 billion, according to the report.
“We have seen a very strong pace of build-ups over the past four quarters with new credit extensions for mortgages and auto loans combined with a rebound in demand for credit card loans,” said Joelle Scally, administrator of the Center for Microeconomic Data in New York. Fed. “However, there are still two million mortgage forbearers who are vulnerable to financial hardship once the forbearance programs end.”
If you are struggling with new debt, there are several options available to you to help reduce your monthly payments or pay off your debts. Here are some strategies:
Take out a personal loan: Personal loans allow Americans to consolidate their debt by offering them a lower interest rate and a fixed payment plan. Combining their highest interest rate credit card debt into one payment reduces the amount of interest they will pay over the life of the loan.
This method creates an easier path to debt repayment. However, if consumers are still unable to meet the minimum payments on their monthly bills, they could go back to using their credit cards for other purchases and put themselves in a worse financial position. When taking out a new loan, borrowers should also change their lifestyle and spending habits, or reduce other payments as part of their debt management plan to limit their spending.
If you want to get a personal loan, visit Credible to compare the personal loan rates of several lenders at once and see which one is best for you.
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Mortgage refinancing: A mortgage refinance offers a variety of options to help manage debt, including refinancing at a lower interest rate to potentially save on your monthly payment and reduce expenses. Refinancing with cash could also help homeowners pay off high interest debt with a low interest mortgage. Depending on the homeowner’s current interest rate and other loan terms, he may be able to withdraw additional money from his home to pay off his credit card debt while reducing his monthly mortgage payments.
Visit Credible to compare options and talk to a home loan expert to get all of your questions about your debt repayment strategy answered.
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Buy new auto insurance: Auto debt contributed to the rise in household debt in the second quarter of 2021 with an increase of $ 33 billion, according to the New York Fed report. Indeed, more and more Americans have bought cars coming out of the pandemic and the costs of new and used cars have risen, leading to an increase in auto loans, according to the report. But drivers can reduce their total auto costs by purchasing insurance and lowering their rates. This extra money can be used to pay off their car loan or some other type of debt.
If you want to buy new auto insurance, visit Credible to fill in your information and browse through several offers at once to choose the insurance plan that best suits you and your needs.
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