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  • Frank Tian

๐Ÿ•ต๏ธโ€โ™‚๏ธ 7 At-risk Consumer Segments to Watch

Even with some good US data points:

  • July inflation drops to 8.5%

  • July added 528K jobs


The horizon is still cloudy with multiple risk factors.


For consumer lending, here are 7 segments worth special attention:


๐Ÿ‘‰ Variable rate mortgage holders, especially subprime - were first to crack in the Great Financial Crisis.


๐Ÿ‘‰ Home equity loan with a high Loan-To-Value ratio - the property value could quickly drop then the equity evaporates.


๐Ÿ‘‰ Subprime auto loan holders - delinquency rates for this segment are steadily inching up.


๐Ÿ‘‰ At-risk student loan holders - student loan payments are set to resume in September; 5 million borrowers are identified as at risk by CFPB.


๐Ÿ‘‰ Those in previous forbearance programs - theyโ€™ve shown vulnerable financial positions; some are still struggling with delinquency.


๐Ÿ‘‰ Cash balance on the decline - such info is available for full-service banks or can be sourced via open banking data.


๐Ÿ‘‰ Those who used credit cards and personal loans to purchase cryptos - many lost their real-world money as the crypto market crashed into the โ€œcrypto winterโ€.


Any other segment you are watching?


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