 TITLE: Growth of Personal Loan Debt Slows Amid Pandemic CONTENT: Personal Loan Delinquencies Decreased in 2020\n---------------------------------------------\nAs the pandemic took hold and the economy began to slump, many worried that consumers would fall behind on their debt payments. During the Great Recession that began in 2007, delinquencies grew to record highs, and the impact of falling behind left a lasting stain on the economy and individuals' finances.\nIn an effort to minimize widespread delinquency and other economic repercussions caused by the pandemic, Congress and other institutions took preemptive measures by issuing relief measures—including legislation in the form of the Coronavirus Aid, Relief and Economic Security (CARES) Act—that gave borrowers options to help them avoid letting their accounts become delinquent.\nPaired with other factors, these measures have seemingly proved effective thus far—at least in part—as credit report data show that across nearly all debts and time periods, consumers have improved their delinquency rates since 2019.\nPersonal loan delinquency rates saw significant improvement in the past year, decreasing by double-digit percentages across measures of delinquency. The ratio of personal loan accounts severely delinquent—90 to 180 days past due (DPD)—shrank by 35% from 1.37% to 0.89% between 2019 and Q3 2020, according to Experian data. The portion of accounts 30 to 59 DPD reduced by 24% and accounts 60 to 89 DPD shrank by 17%.\nSource: Experian\nPersonal loans were not the only credit type to see a decrease in delinquencies. In fact, across the U.S., the ratio of all delinquent accounts shrank between 2019 and 2020, and this pattern of decline was true for all debt types, according to Experian data.\nThe reasons behind improvements for student loan and mortgage are fairly clear: The CARES Act not only suspended student loan repayment, but it issued guidance for mortgage lenders, allowing many consumers financially impacted by the pandemic to place their home loans in forbearance.\nThe explanation for the decrease in personal loan delinquency is more opaque, however. While the federal government urged lenders to work with borrowers who were struggling due to the pandemic, there was no clear mandate for personal loans and other debts. It's unclear to what extent personal loan issuers worked with consumers financially impacted by the pandemic, but there is a possibility that at least some of the improved delinquency rates can be attributable to lender accommodations such as lowered monthly payments. END