What's the Average Personal Loan Balance at Every Age?
by Christy Bieber | Updated July 21, 2021 - First published on July 31, 2019
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Personal loans have become an increasingly popular type of financing. More than 10% of U.S. adults had an outstanding personal loan as of the fourth quarter of 2018.
Are you one of the millions of Americans who already has a personal loan? Or are you thinking about becoming one by taking out a personal loan in 2019? Either way, it's helpful to see how your loan balance compares with your peers.
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What counts as a personal loan?
Personal loans are different from other types of loans like car loans and mortgages.
When you get a car loan or mortgage, it has to be used for a specific purpose -- to buy a vehicle or a house or to pay for school. Mortgages and car loans typically have to be secured by the house or vehicle, which means lenders have an ownership interest in the home or car. And they could take the property by foreclosing or repossessing if you can't pay.
With a personal loan, on the other hand, you can borrow for virtually any purpose you'd like. Most personal loans are unsecured, so there's no collateral guaranteeing the loan. Unlike credit cards, personal loans are for a fixed sum of money that you receive up front. And, also unlike credit cards, you agree on a payment schedule with the lender to repay the loan over a set time period with steady monthly payments.
What's the average personal loan balance at every age?
The average personal loan balance in 2018 was $15,143. But some age groups have more debt than others. The table below shows the average personal loan balances from ages 18 to 90.
| Age | Average Personal Loan Balance |
| 18 | $3,801 |
| 24 | $7,252 |
| 30 | $11,151 |
| 36 | $14,330 |
| 42 | $16,584 |
| 48 | $18,019 |
| 54 | $18,389 |
| 60 | $19,164 |
| 66 | $19,668 |
| 72 | $19,101 |
| 78 | $17,043 |
| 84 | $16,261 |
| 90 | $13,297 |
Data source: Experian
Which generations have the most debt?
As you can see, debt balances tend to go up as people age. But they do decline once borrowers enter the later years of their life.
Baby boomers had the highest average personal loan balance of $19,403. Here's how other generations stack up:
- Gen X: $17,401.
- Silent generation: $17,018.
- Millennials: $12,574.
- Gen Z: $5,941.
Older people are more likely to have high personal loan balances. They're also more likely to have personal loan debt in the first place. In fact, people aged 45 to 52 average the highest number of loans per person. Within this age group, borrowers had 1.1 personal loans each.
There's a number of reasons why personal loan balances go up as people age. Increasing financial obligations that come with time include college costs, mortgages, and credit card balances built up over the years.
Is your personal loan balance above average?
If your personal loan balance is above average, paying off what you owe eats up more of your cash. And having more debt means you'll pay more interest than others with loans at comparable rates.
Personal loans tend to have lower interest rates than credit cards, which makes them a good option for consolidating debt or borrowing for essential expenses. But you still don't want a debt balance that's too high. The more interest you pay, and the more you owe, the less cash you have for accomplishing other financial goals.
To reduce your obligations and free up cash, work to pay down your personal loan balance ASAP. You shouldn't do this if you have debt at higher rates to pay down first, and you shouldn't compromise other goals like saving for retirement. But getting serious about debt repayment is still worth your time.
Americans of every age owe a lot in personal loans
Everyone's financial situation is different. Assess your own financial goals to decide if working on paying down your personal loan early makes good sense for you.
And if you're feeling overwhelmed, don't worry. You're not alone. Americans of all ages have a lot of personal loan debt.
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About the Author
Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
