There may be new evidence that a strong job market does not necessarily lead to financial freedom for individuals. Over 7 million Americans are at least 90 days behind on their car payment. A car is a necessity for most people and the idea of losing it to repossession is enough to keep them awake at night. What can these individuals do to get back on track?
Who Is Struggling with Car Payments?
According to a recent article in the Washington Post, the majority of the people that are 3 months behind on their payments are under the age of 30. They have low credit scores and they are finding it difficult to pay their monthly student loan bills. A large portion of these borrowers are “subprime” meaning their credit score is under 620. Most of the borrowers that are more than 90 days late on their payments received their loans from a “car finance” company as opposed to a traditional credit union or bank. Less than 1% of borrowers from credit unions are 90 days late on payments.