Rising Interest Rates Lead to Increased Auto Loan Rejections

As the Federal Reserve continues to raise interest rates, car buyers are facing a heavy burden with increasing auto-loan rejections. The New York Federal Reserve found that 14% of auto loan applicants were rejected in the past year, the highest proportion since 2013. The rejection rate for credit applicants overall reached 21.8%, the highest level since 2018. The rising rates, along with soaring vehicle prices, have made it difficult for borrowers to afford monthly payments. However, savers can benefit from higher yields on savings accounts and certificates of deposit. Mortgage rates have fluctuated throughout the year, but if the economy cools, rates are predicted to end the year closer to 6%. Despite progress in reducing inflation, high rates on consumer and business loans are expected to remain in place until at least 2024.