Beyond the individual financial issues that this can cause, J.D. Power and TransUnion pointed out that elevated LTVs could be viewed as a warning sign for future delinquencies. Subprime borrowers, or those with credit scores in the high-500s and low-600s, are already considered at higher risk of default, and the study found that most of them saw LTVs of 140 percent or higher in early 2020.
Even if your financial situation and credit are solid, keeping a handle on how much you borrow, and ultimately pay, is a good idea:Try to pay off the loan early by making double monthly payments whenever you can. This can save hundreds, even thousands of dollars in interest.
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