Personal Loan Rates at Commercial Banks Trending Up

Data from the St. Louis Fed shows rates on 24 month personal loans trending up in recent quarters.

The recent increase in rate has not kept pace with the increase in 2 year treasury yields.

The spread of the loan minus treasury rates has decreased from a peak of 10.67% in May 2012 to 7.81% in May 2018. This decrease of almost 300 basis point may be a result of banks getting more comfortable with personal credit. For banks to maintain this spread personal loan rates will increase as treasury bond rates increase.

Tableau:

https://public.tableau.com/profile/paul.mangione#!/vizhome/FinanceRatePersonalLoans/LoanRate

Disclaimer - This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

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