June 2026 Consumer Unsecured Performance: Strength Holds as Bottom Grade Returns Normalize

dv01's latest research shows June extended the sector's strongest performance stretch on record, with all metrics landing in line with or ahead of seasonal trends. The scale of outperformance has moderated against tougher comps, though Cure and Made Payment rates beat seasonal trends for only the second time this year.

What the Data Shows:

• Bottom Grade returns are normalizing: While 2023 and 2024 vintages delivered ROIs near 15%, early results from the 2025-Q2 book suggest those outsized returns were cyclical, with ROI growth already running several hundred bps lower.
• Impairments become the clearest performance signal: Impairment Net Charge-offs posted their third-best June on record, while charge-offs missed seasonal expectations for the first time in over a year. With charge-offs near their floor, impairments have become the better measure of relative credit strength.
• 2025 vintages show signs of a turnaround: The 2025-Q1 and Q2 vintages initially deteriorated faster than any vintage since 2022, but improved as they seasoned. By loan age 10, both are outperforming 2024-Q4 on impairments, while 2025-Q1 is also ahead on combined impairments and charge-offs.

What We’re Watching

• As impairments take the mantle from charge-offs in relative seasonal outperformance, will the back half of the year see further convergence versus pre-COVID levels, and how low can that bring charge-offs?
• How much of the recent convergence of the 2025 vintages relative to 2024-Q4 holds as the vintages season?
• Given the record originations of June 2026, will further performance improvement draw even more investors to the asset class or will it bring increasing risks of weaker originations, which have thus far been held at bay?