June 16, 2024

Lenders seek guidance from PTI as they address affordability concerns

Lenders are increasingly considering payment-to-income ratios in their credit decisions as affordability continues to be a challenge, particularly in nonprime lending. According to Edmunds, the average monthly payment for a new vehicle in the first quarter of 2024 was $735, a figure that has remained stable in the $730 range for over a year. At the same time, insurance costs are on the rise […]


Q: Why are lenders looking more at payment-to-income ratios?

A: Lenders are focusing on payment-to-income ratios to ensure borrowers can afford their payments and to mitigate default risks.


With payment-to-income ratios playing a more significant role in credit decisions and the steady increase in insurance costs, consumers need to carefully consider their financial situation before taking on new credit obligations.

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