US Consumer Loan Demand

Prescient Models has developed an approach to predicting US consumer loan demand. Consumer loans are primarily auto loans and credit cards. This model is calibrated to the quarterly Federal Reserve Board Senior Loan Officer Opinion Survey. However, our model is available weekly and at the state level and major metropolitan areas.

The nationwide, concurrent estimate is available free and shown below. For the nationwide forecast and the state or metro concurrent estimates and forecasts, contact sales@prescientmodels.com for availability and pricing.

Why predict consumer demand for loans? Because research has shown credit risk goes through cycles with the economy independent of credit scores and product features. When conditions are unfavorable from the consumer's perspective, the low risk consumers will stop seeking credit, leaving a riskier pool of consumers. This process is called macroeconomic adverse selection, and it is strongly tied to consumer demand for loans. In other words, consumers know more about their financial security than lenders do, and when consumer demand falls, credit quality for new originations will be abnormally poor.

Lenders can use these consumer loan demand estimates as indicators of these risks or opportunities in the current or future environment. When demand is falling industry-wide, be wary of what you book. When demand is high, the opportunities are good.

DISCLAIMER: Although the Contents contained herein are provided under the highest professional standards in the generation of these forecasts, Prescient Models LLC does not guarantee the accuracy or completeness of any information contained herein. Prescient Models LLC specifically disclaims all warranties express or implied with respect to the use of this information or any results with respect thereto. In addition the information contained herein shall in no way be construed to constitute a recommendation by Prescient Models LLC with respect to the purchase or sale of any security or its derivatives.