More than half of mortgage and auto loan borrowers (54% of each) are concerned about their ability to make their payments over the next three months, according to a new Bankrate.com report.
However, 3 in 5 of those concerned auto and mortgage borrowers have not reached out to their lenders to seek payment relief.
Overall, 17% of mortgage holders and 15% of auto loan holders are very concerned about their ability to make payments over the next three months. Meanwhile, 18% with a mortgage and 20% with an auto loan are somewhat concerned, and 20% of mortgage borrowers and 19% of auto borrowers are slightly concerned.
Levels of concern are highest amongst millennial (ages 24-39) mortgage borrowers (70%), those with lower income and education levels (74% who make under $30,000 annually vs. 45% who make $80,000 or more annually and 60% without a college degree vs. 46% with a college degree), as well as those with children under age 18 (65% vs. 53% of nonparents).
The numbers are similar for auto loan borrowers; 76% in the lowest income bracket are concerned vs. 40% of the highest earners, 59% without a college degree are worried vs. 46% with a college degree, and 66% of parents with children under 18 are anxious about being able to make the next three months’ payments, vs 56% of nonparents.
In both cases, less than half (40% each) of concerned borrowers have contacted their lenders to discuss payment relief, with millennials being both the most likely.
As to the reasons why more concerned adults haven’t reached out to their lenders, some say they didn’t know this was an option (18% for mortgage; 23% for auto), while others have not gotten around to it (11% for mortgage; 14% for auto) or are waiting for their lenders to contact them (5% for mortgage; 7% for auto). Remaining concerned borrowers who have not reached out to their lenders say they instead figured out a solution on their own (28% for mortgage, 26% for auto) or cited an unspecified reason (38% for mortgage, 31% for auto).
“For households struggling financially due to the pandemic, payment relief is available, but you have to ask for it,” said Bankrate.com chief financial analyst Greg McBride, CFA. “Make this a top priority as forbearance can ease the strain of what may well be two of the biggest components of the household budget.”
Among those concerned borrowers who have contacted their lenders, 43% of mortgage and 46% of auto loan holders have successfully received payment relief, while less were unsuccessful (25% of mortgage holders and 23% with an auto loan).
Twenty percent of mortgage holders and 19% with an auto loan who contacted their lenders still have a request in progress, while 11% and 12%, respectively, were unable to reach someone or submit a request.
Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,026 adults, including 1,328 mortgage borrowers and 1,234 auto loan borrowers. Fieldwork was undertaken April 20-23, 2020. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.