5 Types of Debt Most Americans Have (How Do You Compare?)

Carrying a heavy debt burden can put a big strain on your budget. If you can become debt-free, it’s always a good idea. But some people are so deeply in the red that it can be challenging for them to quickly pay off their obligations.

How does your debt compare to that of the average American? Recently, LendingTree broke down debt levels in the 50 biggest U.S. metros. Here is the average debt that people hold today.

When you hold debt of any type, it makes it harder to get ahead financially. Nonmortgage debt includes everything except your mortgage balance.

In LendingTree’s study, nonmortgage debt includes auto loan debt, personal loan debt, student loan debt, credit card balances and other types of debt.

On average, Americans hold $37,827 in nonmortgage debt. Most people have nonmortgage debt, with 97.1% of people carrying some form of nonmortgage debt on their personal balance sheet.

After mortgages, auto loan debt is the second-largest category of debt, with Americans owning $1.626 trillion in car loans.

On average, auto loan debt totals $12,437 for each individual. For drivers with a new vehicle, the average car payment was $734 per month, according to LendingTree. For financed used vehicles, the average monthly car payment was $525.

The average loan term is a length of 68.5 months for new cars and 67.4 months for used vehicles.

Refinancing your auto loan debt can be one way to make it more manageable.

Americans owe a total of $1.74 trillion in student loan debt, including federal and private loans. At graduation, more than 50% of students walk the stage with debt.

On average, student loan borrowers carry a balance of $11,747. There has been a lot of talk about forgiving student loan debt, but by and large those efforts have run into court challenges.

With a total of $1.166 trillion in credit card debt, American credit card debt is at an all-time high since the Federal Reserve Bank of New York began tracking this data in 1999. Americans carry an average credit card balance of $7,890.

Generally, credit cards come with notoriously high interest rates attached. High interest rates can make it difficult to climb out of credit card debt.

Americans carry a total of $246 billion in personal loans, or an average of $3,703 per person. A total of 23.9 million Americans have personal loans.

Although personal loan debt can be a burden, more than half of borrowers use the loan to pay down other debts, LendingTree says. Debt consolidation and refinancing credit card debt with a potentially lower interest rate can lead to savings on interest payments for borrowers.

However, if a borrower takes on more debt along the way, it’s hard to make financial progress.

One alternative to taking out a personal loan to pay off debts is to pick up a part-time job or develop a side hustle so you can earn extra income and use it to get ahead of your debts.

For most households, the combination of all these debt payments puts a damper on their budget. If you are ready to get out of debt, build a game plan today.

You might start by talking to a financial advisor or other money professional who can offer tips for building a solid financial foundation.