Non-revolving credit, which mainly includes student loans and auto loans, increased by $12.6 billion to a non-seasonally adjusted $1.987 trillion in June, Federal Reserve data showed.
Student loans grew by $3.3 billion. Even if the Fed did not disclose exact data on auto financing, the increase in student loans indicates that the former drove the overall increase in non-revolving credit.
According to the Wall Street Journal, trend figures early this year showed that Americans have been borrowing money for education. They switched their attention to studying as they are unable to find jobs.
However, consumers have been willing to borrow money to purchase new cars in the recent months.
According to analysts, the auto sales this year will return to pre-recession levels, completing the 180-degree turn from the Great Recession which caused many Americans to postpone new-car purchases.
Meanwhile, revolving credit increased by $300 million to $816.7 billion, Fed’s data also showed. Revolving credit, like credit cards, is used for smaller purchases and has higher interest rates. It had been flat in the aftermath of the recession.
Total consumer credit, which includes all household borrowing except mortgages, is up in June by $13 billion to $2.8 trillion.