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30-somethings to drive consumer loan demand

Rising personal credit tide predicted by risk managers

30-somethings to drive consumer loan demand

Consumers’ demand for credit will rise in the months ahead, and a major portion of that increasing appetite will come from borrowers in their 30s.

So predicts a cross section of risk managers at banks and other financial services companies in a survey by FICO, the Professional Risk Managers’ International Association, and Columbia Business School. The risk managers polled in the quarterly survey came from the United States and Canada.

Nearly half—46%—of the risk managers surveyed predict that the amount of new credit requested by consumers will rise over the next few months, while only 16% think it will fall. Usage of existing credit lines is expected to increase, with 46% of the sample forecasting a rise in requests for higher credit limits. And 53% of respondents anticipate that credit card balances will rise.

Where will that growth come from? Half of the sample expect borrowers between 30-39 to fuel most of the growth. Another 22% of the sample think younger borrowers, those 20-29, to be driving the increases. And 18% see consumers 40 and up causing the increase.

Broadly, executives indicated that the financial services business will have no problem meeting the rising demand. More than 70% think rising demand for new home mortgages will be met, and 80% of respondents said that supply will meet demand for mortgage refinancings, credit cards, auto loans, and student loans.

The survey also reported that nearly three out of four executives expect interest rates to rise in the next few months.

Steve Cocheo

Steve Cocheo’s career in business journalism has taken him to all 50 states and nearly every corner of banking in institutions of all sizes. He is executive editor of ABA Banking Journal, digital content manager of ababj.com, and editor of ABA Bank Directors Briefing. He coordinates the popular Pass the Aspirin and First Person features and wrote the booklet series Focus On The Bank Director. He is the only journalist to have sat in on three federal banking exams, was a finalist for the Jesse H. Neal national business journalism awards, and a winner of multiple awards from the American Society of Business Publication Editors.

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