Major Bank Insider says 50% of personal loans “debt consolidation”

15 Jul

I recently interviewed several employees of the major 4 banks. The emloyees worked in the personal lending call centers. All stated that 50-60% of the lending they did was for the purpose of debt consolidation.  The employees stated that in all cases the debt was credit card debt.

I’m finding it very difficult to get data on the debt consolidation lending. A debt may be “consolidated” several times making it difficult to establish the real levels of “consolidated debt”. A personal loan may be taken out to consolidate several credit cards which is in turn consolidated into a mortgage. It’s very much a circular argument. How much of the oceans originated as snow melt?

There is $143 Billion in “other personal credit” outstanding which does include car loans.  It would be fair to say that a significant portion of this is debt consolidation related.

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