In this article:
- Millennial Personal Loan Debt Grows 44% in Five Years
- Millennials’ Personal Loan Balances Still Lower Than Most
- Millennials in South Dakota Have Highest Average Personal Loan Balances
- Millennials in Puerto Rico Have Lowest Average Personal Loan Balances
- Millennial Personal Loan Debt Larger in States With Higher Credit Scores
There's no avoiding the fact that millennial debt is growing—and quickly. Across all types of debt, millennials' average balances have spiked, showing that the maturing generation seems open to taking on new debt.
In the past five years, millennial consumers—those ages 23 to 38—increased their average personal loan balance by 44% to $11,819, according to Experian data from the second quarter (Q2) of 2019. Still, that's 27% lower than the national average and 39% lower than the average balance held by baby boomers, who carry the most personal loan debt of any generation.
As part of our ongoing look at personal loans, Experian analyzed consumer credit data from Q2 2019 to learn more about millennials' borrowing habits and how they compared with other generations. Read on for our insights and analysis.
Millennial Personal Loan Debt Grows 44% in Five Years
While millennials have one of the lowest personal loan burdens, over the past five years, the amount the generation owes on their personal loans has grown 44%, according to Experian data. This is more than double the growth seen by any other age group.
Since the second quarter of 2014, millennial debt grew from $8,201 to its current level of $11,819. Generation X also saw double-digit growth during this period, increasing average personal loan balances by 16%. Baby boomers' personal loan debt grew by only 2% in the past five years, while the silent generation saw an 8% decrease. Generation Z was not included in this analysis due to their age.
Millennials' Personal Loan Balances Still Lower Than Most
Following only members of Generation Z—who carried an average personal loan balance of $4,526 in Q2 2019, millennial consumers had the second-lowest personal loan debt of any generation. This balance is up 5% from last year's average balance of $11,303, but is still drastically lower than the $19,253 held by baby boomers.
*Source: Experian data
Millennials in South Dakota Have Highest Average Personal Loan Balances
When looking across the country, millennials had the highest average personal loan balances in South Dakota, carrying an average of $19,794 in Q2 2019, according to Experian data. That's 67% higher than the average millennial personal loan balance across all states and is 22% higher than the national average of $16,259.
South Dakota was followed by four other states in the American northwest, including Wyoming, North Dakota, Montana and Washington.
| States With the Highest Average Millennial Personal Loan Debt | |||
|---|---|---|---|
| State | Average FICO® Score | Average Personal Loan Debt Q2 2019 | Difference From National Average |
| South Dakota | 691 | $19,794 | +22% |
| Wyoming | 671 | $18,824 | +16% |
| North Dakota | 694 | $18,615 | +14% |
| Montana | 680 | $18,502 | +14% |
| Washington | 691 | $18,491 | +14% |
*Source: Experian data from Q2 2019. Data is specific to millennial credit and debt.
Millennials in Puerto Rico Have Lowest Average Personal Loan Balances
On the other end of the spectrum, millennials in Puerto Rico carried the lowest average personal loan debt, with only $7,401 in Q2 2019. This is 54% lower than the national average across all generations and is 37% lower than the average among all millennials.
| States With the Lowest Average Millennial Personal Loan Debt | |||
|---|---|---|---|
| State | Average FICO® Score | Average Personal Loan Debt Q2 2019 | Difference From National Average |
| Puerto Rico | 657 | $7,401 | -54% |
| Rhode Island | 673 | $8,868 | -45% |
| Illinois | 677 | $9,221 | -43% |
| Georgia | 645 | $9,583 | -41% |
| Texas | 648 | $10,132 | -38% |
*Source: Experian data from Q2 2019. Data is specific to millennial credit and debt.
Millennial Personal Loan Debt Larger in States With Higher Credit Scores
While the average millennial's personal loan debt varied across the country, one variable remained the same among the top five states with the highest balances: They also had some of the highest average FICO® Scores. Millennials in Washington, South Dakota and North Dakota all had average FICO® Scores that were in the top 20% in the U.S. among this generation.
Among states with the lowest personal loan balances, the trend was the same: The two states with the lowest personal loan balances—Georgia and Texas—had FICO® Scores that were in the bottom 20% of millennial FICO® Scores across the country.
While millennials' personal loan debt is growing at a quick pace, the generation's average balance remains low relative to other generations as this group grows into their prime borrowing years.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.