Personal Loan Balance by Age: What's the Average?

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

How much does the average American owe in personal loans? Find out if you owe more or less than the average here.Image source: Getty Images.

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.

One email a day could help you save thousands

Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.

By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

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.

The Ascent's Best Personal Loans for 2021

The Ascent team vetted the market to bring you a shortlist of the best personal loan providers. Whether you're looking to pay off debt faster by slashing your interest rate or needing some extra money to tackle a big purchase, these best-in-class picks can help you reach your financial goals. Click here to get the full rundown on The Ascent's top picks.