The Average Millennial Has Nearly $30K in Debt. Here Is What They Should Do. (2024)

NEW YORK – March 14, 2023 – ( Newswire.com )

Credello: Studies show that Millennials often have debt. The average amount is almost $30K. Some have more, while others have less, but it’s a sobering number.

There are actions you can take if you’re a Millennial and you’re carrying this much debt. We’ll talk about some strategies right now.

Get a Personal Loan

Many Millennials are paying for things with credit cards. This is tempting, but it can backfire. Credit cards can have interest rates close to 35%.

If you have several outstanding debts, how much of a personal loan can I get should probably be the question you’re asking. If you approach a bank or credit union and get a personal loan, you can use that money to pay off your debts.

Why Are Personal Loans So Attractive?

Getting a bank or credit union loan simplifies your life. If you do this, you only have one loan to repay, rather than owing several different credit card companies and other entities.

Also, when you get a personal loan, you’re liable to pay much less in interest when you’re repaying it than you would if you’re paying off outstanding credit card debt. We mentioned that credit cards can charge as much as 35% in interest, but you usually pay far less with personal loans.

You can sometimes get interest rates of 8% or lower with personal loans if you have excellent credit. If your score isn’t the best, you might still get an interest rate of 15% or lower. That’s much better than the 30-35% you’d likely pay with credit cards.

What Else Can You Do?

As a Millennial dealing with debt, you’ll know a set amount you must pay each month once you have a personal loan. The next step toward financial responsibility is to pay all your other bills on time.

With a personal loan in place, you owe money to one entity as a set payment amount each month. You will also have monthly expenses such as rent, utilities, groceries, and car payments.

If you set up a household budget and stick to it, you can stay on top of those other bills while you pay off the personal loan. You can create a spreadsheet showing how much money you’re bringing in and the cost of your expenses.

Improve Your Credit Score

When you make payments on your personal loan and on-time payments of your bills, that will gradually improve your credit score if it isn’t so great. Making on-time payments raises your VantageScore and FICO scores. That’s always to your benefit.

You should not open any new credit card accounts if you can avoid it. That way, you won’t be tempted to use one of your new cards and spend beyond your means.

You can also set up autopay for your bills. You can set up a service that monitors when you pay your bills and reports that to the major credit bureaus.

You Can Chip Away at Your Debt

If you’re a Millennial with tens of thousands of dollars in debt, you can consolidate the entities to which you owe money by getting a personal loan from a reputable lending entity. You can use that money to pay off your credit cards and other debt.

You’ll likely pay far less interest on your personal loan than credit card interest. You’ll have one entity to pay each month, and you’ll know the amount that’s due.

In addition, you can budget by setting up a spreadsheet and calculating how to spend the money you have coming in on your monthly bills. If you don’t miss any payments, you’ll stay on top of those bills, and you’ll raise your credit score.

You should have excellent credit by the time you’ve paid off the personal loan. You’re now in a position to keep your credit score high and avoid getting deep into debt through frivolous spending habits.

About Credello

Credello is a financial tech company offering a personal finance tool that simplifies financial decisions through personalized, on-demand recommendations — so users can borrow, save, or invest with confidence.

Credello believes that finding the right financial product should be as easy and interactive as online shopping and we are on a mission to make that possible. For more information, please visit https://www.credello.com.

Contact Information: Keyonda Goosby Public Relations Specialist press@credello.com (201) 633-2125

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Original Source: The Average Millennial Has Nearly $30K in Debt. Here Is What They Should Do.

The Average Millennial Has Nearly $30K in Debt. Here Is What They Should Do. (2024)

FAQs

The Average Millennial Has Nearly $30K in Debt. Here Is What They Should Do.? ›

If you're a Millennial with tens of thousands of dollars in debt, you can consolidate the entities to which you owe money by getting a personal loan from a reputable lending entity. You can use that money to pay off your credit cards and other debt.

What to do if you are 30K in debt? ›

You can turn to a variety of strategies to reduce credit card debt, including debt consolidation, balance transfers, negotiations with creditors, debt management programs, and more. A good place to start is to review your options. From there, you can decide which approach best suits your situation.

How much debt does the average millennial have? ›

Average Millennial debt by type
Type of debtAverage amount
Mortgage$295,689
Credit card$6,274
Total non-mortgage*$29,702
Jan 23, 2024

How long to pay off 30K in debt? ›

It will take 41 months to pay off $30,000 with payments of $1,000 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

How much is the average 21 year old in debt? ›

Average debt by age
GenerationAverage total debt (2023)Average total debt (2022)
Gen Z (18-26)$29,820$25,851
Millenial (27-42)$125,047$115,784
Gen X (43-57)$157,556$154,658
Baby Boomer (58-77)$94,880$96,087
1 more row
Mar 28, 2024

How to pay off $20k in debt fast? ›

Use a debt consolidation loan

With a debt consolidation loan, you borrow money from a lender and roll all of those debts into one loan with a single interest rate. This allows you to make one monthly payment rather than paying multiple creditors.

Is 30K in debt a lot? ›

The average amount is almost $30K. Some have more, while others have less, but it's a sobering number. There are actions you can take if you're a Millennial and you're carrying this much debt.

How many millennials are financially stable? ›

Exploring the financial lives of Millennials through a financial health framework offers new insight into the needs and challenges of this unique demographic. According to data from the 2019 U.S. Financial Health Pulse consumer survey, only 24 percent of Millennials are Financially Healthy.

Why do millennials have the most debt? ›

King said millennials' purchasing preferences and the soaring cost of living has led many into "a vicious cycle of taking on more debt." Many were "forced" to rely on credit cards and loans to meet their needs, adding to their "crippling debt pile."

What is the average wealth of a millennial? ›

The average millennial under age 35 has a net worth of about $76,000; those over age 35 stand at over $400,000. Members of Generation X have average net worths between $400,000 and $833,000, and older generations including baby boomers and the Silent Generation have average net worths of over $1 million.

How to pay $30,000 debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How to pay off $30,000 in debt in 2 years? ›

To pay off $30,000 in credit card debt within 36 months, you will need to pay $1,087 per month, assuming an APR of 18%. You would incur $9,116 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

How to pay off debt fast with low income? ›

SHARE:
  1. Step 1: Stop taking on new debt.
  2. Step 2: Determine how much you owe.
  3. Step 3: Create a budget.
  4. Step 4: Pay off the smallest debts first.
  5. Step 5: Start tackling larger debts.
  6. Step 6: Look for ways to earn extra money.
  7. Step 7: Boost your credit scores.
  8. Step 8: Explore debt consolidation and debt relief options.
Dec 5, 2023

How many Americans are debt free? ›

What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.

At what age do most people pay off their house? ›

But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.

What is a good age to be debt free? ›

“Shark Tank” investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.

How can I pay off $30 000 in debt fast? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How much debt is too high? ›

Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.

Is 20k in debt a lot? ›

“That's because the best balance transfer and personal loan terms are reserved for people with strong credit scores. $20,000 is a lot of credit card debt and it sounds like you're having trouble making progress,” says Rossman.

How can I pay off $40 K in debt fast? ›

To pay off $40,000 in credit card debt within 36 months, you will need to pay $1,449 per month, assuming an APR of 18%. You would incur $12,154 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

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