According to analysis by Lending Tree, Black borrowers are more than twice as likely to be denied credit than white Americans.
According to the data, 57% of loan applications by Blacks making $40,000 to $100,000 were rejected or approved for amounts lower than requested, compared to just 22% for whites. Blacks making $100,000 or more annually had 31% of their applications rejected or approved for lower amounts than requested, compared to just 10% for whites.
The analysis also found that Black Americans with college degrees experienced more debt. The study found that Black bachelor’s degree recipients had 20% more student loan debt than whites with bachelor’s degrees.
"It's encouraging that Americans are having these conversations more openly and with more vigor and purpose,” Tendayi Kapfidze, chief economist at LendingTree, said. “Highlighting these racial disparities shows that systemic issues have held back generations of our fellow citizens. It is ultimately to the detriment of everyone as the economy is deprived of our best efforts by denying opportunities to many capable people. The creation of these disparities was and is often government-sanctioned and enforced, and so they should be addressed via legislative remedies in addition to societal change."
Compounding the challenges for Blacks to obtain lending, the data showed that the median net worth of Black families is one-tenth of those of white families.
Lending Tree said it used 2018 Bureau of Labor Statistics data, 2020 Economic Policy Institute report, various Federal Reserve data, 2020 Federal Reserve Bank of St. Louis data, 2017 National Center for Education Statistics report, 2020 Pew Research Center report and U.S. Census Bureau to conduct its analysis.
To read the full study, click here.