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The average American has $52,940 worth of debt across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans.
Data from the Federal Reserve Bank of New York’s Household Debt and Credit report breaks down the average amount of debt Americans have by type, and by borrowers’ ages and location. The data was gathered through a random sample of about 5% of Americans with credit report information.
Here’s what the average American owes.
Here’s a breakdown of the total amount, according to the Federal Reserve Bank of New York’s Household Debt and Credit report from the first quarter of 2021.
Mortgage debt is most Americans’ largest debt, exceeding other types by far. Student loans are the next biggest type of debt among those listed in the data.
Where someone lives tends to have a big influence on the amount of debt they accumulate.
While some parts of the country have higher housing prices and costs of living, it can be lower in other states. California residents, for example, tend to have higher average mortgage balances than many other states with more affordable housing, like Texas and Ohio.
Here is the average debt by type for residents of each US state, according to Federal Reserve Board of New York data from 2019. Scroll right to see the total amount of debt.
Debt tends to peak somewhere around middle age. As a whole, this suggests that Americans tend to pay off debt going into retirement and tend to keep debt balances low in retirement, especially people over age 70. For those under age 30, the largest source of debt is student loans.
While 2019 data separated into ages wasn’t available, Insider took 2017 data from the Federal Reserve Bank of New York that specified total debt per age group and divided it by number of people in each age group to find the average.
It’s worth noting that this calculation spreads the debt load over the whole population, including those that don’t have that type of debt. Debt per person may be higher if only calculated based on the population with that type of debt.
Here’s how the average debt balance breaks down by age group. Scroll right to see more data.
In this data, it’s worth noting that low average mortgages and HELOC balances for people 29 years old and younger are caused by low homeownership rates. According to Census Bureau data, only 34.4% of Americans under age 35 owned homes, while 60.3% of Americans aged 35 to 44 years old owned homes in the first quarter of 2017.
If you want to pay off some of your debt, here’s how to start:
Choose a repayment method and set a goal
Whichever method you choose, the first step is going to be to take stock of everything you owe, how much you owe in total, and the interest rate. Then, you can start to prioritize what you owe.
Two popular strategies are the debt avalanche and the debt snowball. The debt snowball tackles the smallest debt first to build momentum, working through bigger debts next, while the debt avalanche focuses on paying down higher-interest debt first to decrease the amount you pay overall.
Consider consolidating or refinancing while interest rates are low
For borrowers with credit card debt and other relatively small debts with high interest rates, consolidating your debts could make them more manageable. Debt consolidation loans roll all of your existing debts into one debt, with one monthly payment and one balance. You could pay less in interest on a debt consolidation loan than you would on a credit card, especially while interest rates are low.
Refinancing could be a smart move for people with larger debts, like mortgages, private student loans, and car loans. Refinancing replaces your current loan with a new loan, and can often help to bring down the interest rate. With interest rates currently much lower than they have been in the past, refinancing could be a smart move to lower your interest costs and make headway on your debt.
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