Here's how much the typical American pays in debt each month
Americans are tumbling deeper into debt, with the typical household paying $1,583 a month on various loans, a recent study found.
That's a more than $300 increase from people's average monthly debt payment in 2020, according to LendingTree. The report, based on the anonymized credit reports of roughly 310,000 users from July 1 to Sept. 30, 2023, focuses on active debt such as mortgages, auto loans, credit cards, personal loans, student loans and other categories.
Mortgages make up the lion's share of debt, the study found, with property owners making average monthly payments of $1,855 on their home loans. Auto loans account for the second-largest share of debt, with payments averaging $690 a month — an amount that continues to climb as interest rates on auto loans jump. The third-largest category of debt is personal loans, with payments of $517 a month on average.
Generation Xers (ages 43 to 58) carry the most debt, with $1,974 in average monthly payments. Baby boomers (59 to 77) are No. 2 with payments of $1,529, followed closely behind by Millennials (ages 27 to 42) at $1,490. Not surprisingly, given their youth, Gen Zers (ages 18 to 26) have the lowest average monthly debt at $645.
"The combination of high income and great credit means lenders will be eager to lend you money, but it also means you'll have the ability to run up more debt," Matt Schulz, chief credit analyst at LendingTree, said in the report. "That's a real risk, especially considering the many financial issues Gen Xers may face, including paying for kids' college tuition, helping their elderly parents and more."
Generationally, baby boomers pay the most toward student loans — $327 on average, the study finds. That may be because in addition to their own student debt, baby boomers were more likely to borrow to fund their children's higher education, according to the Education Data Initiative.
Around the U.S., Maryland residents have the highest average monthly debt payments, at $1,850, followed by New Jersey residents ($1,770) and Coloradans ($1,734). The states with the lowest average monthly debt payment Mississippi ($1,236), followed by and Missouri and Ohio ($1,288).
Roughly a third of Americans say they have higher balances on their credit cards than they do in emergency savings, according to Bankrate. Sixty-three percent of U.S. adults point to inflation as the main reason why they are unable to save for the unexpected.