Total consumer debt rises with students, car loans double – WWD

New research from credit and lending services firm Credit Summit shows that a staggering amount of consumer debt has piled up in recent years as households have taken out a variety of loans. The company said student loans and car loans have more than doubled since 2010, pushing up total debt.

“In 2021, the typical U.S. household had over $58,000 in student debt and $30,000 in auto loans,” Credit Summit said. “More than $1.5 trillion and $1.4 trillion are owed on student loans and auto loans, respectively.”

It is important to note that student loan repayments have been halted during the pandemic. They were due to restart in May, but there have been media reports that it could be extended.

And while credit card debt has plummeted during the pandemic, loans and mortgages have increased consumer debt burdens. As a result, Credit Summit said total consumer debt “increased by $313 billion in the second quarter of 2021, an increase of 2.1% from the first quarter.” Debt is now $812 billion higher than it was at the end of 2019 and $691 billion higher than in the second quarter of 2020.”

Credit Summit said the 2.1% increase in total consumer debt “was the highest since the fourth quarter of 2013 and the strongest nominal growth since the second quarter of 2007.”

By demographic cohort, the report showed that Gen Xers carry the most consumer debt. Generation X has an average debt load of around $140,000 compared to $97,000 for baby boomers. Millennials are around $87,000 in debt while Gen Z are around $16,000.

The report notes that “one of the most notable trends in recent years has been an increase in debt among younger age groups.” The report’s authors said that not only did millennials and Gen Z have the largest increase in total debt in 2020, “they also had the largest increase in mortgage debt and personal loans.”

Regarding the impact of this debt on consumers, Credit Summit said that it is “clear that many people are concerned about their financial situation, and debt is making the problem worse. The average debt in the United States is so high that 46% of Americans report feeling upset at least once a month because of financial worries.