From personal loans to cars, Aussies are buried under some serious debt.
Millions of Aussies are struggling with a mountain of personal debt, according to new research.
That’s more than $70 billion in personal debt, nationwide – up from $18,301 a year ago – an 11 per cent spike in only 12 months.
The average Aussie with each respective type of debt carries $1,948 in credit card debt, $6,920 in personal loan debt, and $11,370 in car loan debt, according to Finder’s Consumer Sentiment Tracker.
Finder personal finance expert Amy Bradney-George said the skyrocketing cost of living had forced many Aussies to borrow money just to pay for essentials.
“A significant number of people are having to turn to credit cards, buy now, pay later services and personal loans in order to cover day-to-day expenses like food and electricity,” Bradney-George said.
“With inflation at an all-time high, debt is making it even more stressful for people to put food on their tables.”
The data found 54 per cent of Aussies had a credit card as of May 2023 – the equivalent of 10.9 million people.
Just over 14 per cent currently had a personal loan (equivalent to 2.8 million people), while the same proportion had a car loan.
Separate research from Finder revealed 30 per cent of Australians were ‘extremely’ stressed about their current financial situation – up from 22 per cent 12 months ago. That’s a staggering 6.1 million Aussies who are under enormous financial strain.
Things could get worse
Bradney-George said there were fears it could get worse as households continued to face rising interest rates and inflation.
“Debt can quickly get out of control and lead to bigger financial difficulties. When you are struggling to ‘pay off the past’, it stops you from saving for the future,” Bradney-George said.
Break up with debt
“Contact your providers to see if you can set up a payment plan that fits with your income. If your circumstances have changed, you can also talk to your bank’s hardship support team about different options such as payment pauses,” Bradney George said.
“You could also shop around for better rates or consider debt consolidation to help manage repayments.”
Bradney-George said now was the time to protect your financial health and credit score.
“Failing to pay off debt can damage your credit score, which makes a bigger mess in the long run.
“If you’re overwhelmed by debt, you can also get free financial counselling by calling the National Debt Helpline on 1800 007 007.”