DAYTON — Ohioans are facing financial strain as auto loan interest rates climb to nearly 11%, surpassing the national average of over 8%.
Americans collectively hold $1.7 trillion in auto debt, translating to approximately $14,000 per household. In Ohio, the average auto loan rate has increased by about 1.2% this year, exacerbating the financial burden on residents.
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“A lot of people are taking out car loans that maybe they can’t afford,” said Chip Lupo, a WalletHub analyst. “Cars get repossessed, and as a result, financial institutions are forced to boost those rates.”
Lupo warns that rising interest rates on auto loans can have broader implications for personal financial stability. High-interest rates on large purchases can lead to difficulties in obtaining mortgages or apartment rentals.
Lupo explains that financial institutions assess the total debt load of individuals when determining creditworthiness. “They’re going to look at how much is on your mortgage, how much credit card debt,” he said, noting that existing large loans can affect approval chances and interest rates.
As interest rates continue to rise, Ohioans may face increased challenges in managing their financial obligations, impacting their ability to secure favorable terms on future loans.
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