Borrowing among U.S. consumers fell for the fourth straight month in May, dipping by 4.5 percent, according to the Federal Reserve.

The biggest decline was seen in the revolving credit category, which mainly consists of credit card debt. From April to May, the category fell at an annual rate of 10.5 percent. Since March, the category has dropped by $15.7 billion.

Borrowing in the nonrevolving credit category, composed mostly of auto loans, fell for the second month in a row in May, this time at an annual rate of 1.4 percent, or $1.8 billion. Since March, nonrevolving credit has fallen by $18.3 billion.

Interest rates on new-vehicle loans remained stable at 4.13 percent in May, but are still below the first quarter average of 4.31 percent.

Loan terms mirrored the first quarter average, increasing slightly from 62.6 months in April to 62.9 months in May.

The loan-to-value ratio on new-car loans reached 87 percent in May, a slight decrease from the 88 percent recorded in April and below the first quarter average of 89 percent.

Amount financed increased to $27,886 in May, up $89 from the $27,797 recorded in April. The increase snaps the four-month decline in this segment, but is still below the first-quarter average of $28,444.

Consumer credit increased at an annual rate of 0.5 percent in April, according to the Federal Reserve’s monthly report.

Non-revolving credit, which includes auto loans, rose at an annual rate of 7.1 percent in April. Revolving credit continued its month to month decline and fell at an annual rate of 12 percent.

Interest rates on new-vehicle loans continued to drop and reached 4.13 percent in April, down from 4.28 percent in March, but still higher than 3.94 percent in January.

Loan terms remained stable month to month at 62.8 months in April. This was slightly above the 62.5 months recorded in February and down from the 63.5 months posted in January.

The loan-to-value ratio on new-car loans remained steady month to month at 88 percent in April, but was down from 89 percent in February and 90 percent in January.

Amount financed also fell for the fourth-consecutive month to $27,797 in April, down from $27,912 in March. The amount financed in April was $243 less than the $28,040 recorded in February, and $1,582 less than the $29,379 posted in January.

Consumer credit dropped 8.5 percent in November 2009, the lowest figure of the year, according to the Federal Reserve’s monthly report.

The interest rate on 48-month new-car loans originated at commercial banks was 6.55 percent, down slightly from the 6.61 percent average recorded in the third quarter 2009. The interest rate on new-car loans originated at auto finance companies increased slightly from 3.42 percent in October 2009 to 3.73 in November 2009.

Loan terms dropped slightly from 64.4 months in October to 63.4 months in November. The loan-to-value ratio on new-car loans dipped to 91 percent in November, a return to its September level, but down from 93 percent in October.

The amount financed fell from $32,223 in October to $30,506 in November, a difference of $1,717.

Treasury Secretary Timothy Geithner told Congress that the Obama administration is extending the $700 billion financial-rescue program until next October, saying the U.S. must hold on to the money in case of new financial shocks, Business Week reported.

In a letter to congressional leaders, Geithner said the administration doesn’t expect to deploy more than $550 billion of the funds. He said the Treasury may expand the Federal Reserve’s Term Asset-Backed Securities Loan Facility, an effort to jumpstart securitization markets, as well as continue to use the Troubled Asset Relief Program to help struggling homeowners and small companies.

While the TARP expires on Dec. 31, Geithner can extend it by notifying Congress.

The TARP, passed in October 2008 to prevent a collapse of the financial system, has drawn criticism from Congressional opponents of taxpayer-funded bailouts of banks including Citigroup Inc. The Obama administration, preparing the ground for an extension, has emphasized that the program may also be used to aid homeowners and small companies.

“Too many families, homeowners and small businesses still face severe financial pressure,” Geithner said. “Although bank lending standards are starting to ease, many categories of bank lending continue to contract. This contraction has hit small businesses very hard because they rely heavily on such lending, and do not have the ability to substitute credit from securities.”

The extension could bode well for the National Automobile Dealers Association. It is currently working to get the Small Business Administration to expand its floor-planning program, which has received a low response from lenders.

In public comments about the program over the past several weeks, Geithner has cautioned that shutting it down too soon could hurt the economic recovery.

Consumer credit patterns returned to their status quo in September, with interest rates, loan terms and loan-to-value ratios reverting to their pre-Cash for Clunkers (C4C) levels, according to the Federal Reserve’s monthly report.

The loan-to-value ratio, which fell to 86 percent in August during C4C, rebounded to 91 percent in September.

The amount financed increased from $24,405 in August to $30,380 in September. Year-to-date, this was the highest level for amount financed for new-car loans.

Additionally, interest rates decreased from 4.06 in August to 3.5 in September, which is more closely aligned with the July figure of 3.43 percent. Loan lengths increased slightly from 61.8 months in August to 63.6 months in September.