America's Biggest Types of Personal Debt

In today’s economy, massive consumer debt has crippled the personal balance sheets of individuals around the country, making a tough economy even tougher. With foreclosures on the rise and many Americans crippled by over-extended credit cards, personal debt is becoming a major player in the economic crisis.

So, what are the biggest components of personal debt in the country?  The following data from various sources offer a picture of how much Americans owe. Some types of debt, such as medical, microloans and gambling, are not reliably tracked and are not included in this list.

What are the biggest types of personal debt? Click ahead to find out!

By Paul Toscano
Posted 27 Apr 2009

Payday lending is a controversial, yet widely used component of the consumer financing industry, with about $40 billion in short-term loans extended to cash-strapped working individuals, according to the Community Financial Services Association of America.

A payday advance is a small, unsecured short-term loan, normally between $100-$500 with typical interest rates between 15-20 percent and maturities of about 14 days. The idea behind this lending is that people who need fast cash can use their expected payday earnings to immediately pay back the loan.

However, because of the short term of maturities, APR for payday loans can be anywhere between 400 and 700 percent and, if not immediately paid in full, individuals can get themselves into serious financial trouble.

Although a type of business loan, the borrower is normally an individual or small number of individuals who become responsible for the debt should the company enter bankruptcy. The US Small Business Association currently has almost 370,000 outstanding 7(a) and 504 loans totaling approximately $68 billion. Small business loans are also managed by private institutions, but this number is not reliably tracked.

SBA Loans Oustanding (As of 2/28/09)
7(a) – 317,358 loans, $45.93 billion
504: - 52,217 loans, $22.08 billion

More information on these types of SBA loans

The banking industry provides the most credit to agriculture with $114.2 billion in total farm loans outstanding at the end of 2007, according to the American Bankers Association's Center for Agricultural & Rural Banking's annual "Farm Bank Performance" report. The ABA says that $69 billion of this total supports small farms and that nearly 60 percent of all farm loans held by farm banks at the end of 2007 were for amounts less than $250,000.

Like small business loans, these are generally extended to individuals who are themselves responsible for the repayment of the loan.

According to the Federal Reserve, the amount of outstanding loans originated by US finance companies was $313.8 billion as of February 2009. The average amount financed per loan was $26,268 during this period.

Consumer MV Loans Outstanding: $233.9 billion
Securitized MV Loans Outstanding: $79.9 billion*

*Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator.

The best measure for delinquent or underreported tax payments is in the “tax gap,” calculated by the IRS. This number represents the difference between the amount of tax that taxpayers owe in a given year and the amount that is paid voluntarily and on time. The IRS’s most recent total available number, $345 billion, is from tax year 2001, which was released in 2006.

The report also found that individual income tax is the single largest source of the annual tax gap. According the IRS measurement of delinquent collection activities, in the years 2005-2008, the IRS collected an average of $29.3 billion from delinquent filers per year.

Paying for college is a major expense, and according to the US Department of Education, total outstanding federal student loans is $556 billion. According to the College Board, federal loans account for 77% of all education loans.

Non-federal, private-sector loans are not included in the total, as these types of loans are offered by numerous institutions and there is no reliable measure of total private education loans outstanding. However, according to College Board estimates, in 2007-08 the total amount of student loans disbursed by private institutions totaled $17.60 billion, up 592% from the 1997-98 total of $2.54 billion.

The volume of private loans today is a relatively recent phenomenon. In comparison, last year Federal education loans totaled $66.81 billion, up 70% from totals 10 years earlier.

Often referred to as a home equity line of credit, or HELOC, this type of debt differs from a conventional home equity loan in that the borrower does not receive a lump sum of money, but instead is given a credit limit that can be drawn from during a given period, and repayment is made on any amount drawn, plus interest. According to the January 2009 Economic Report of The President, revolving home equity credit outstanding in the United States amounted to $577.8 billion.

According to the Federal Reserve Board of Governors' most recent G.19 report, the total amount of revolving consumer credit outstanding tops $953 billion. The largest component of this type of debt arises from credit cards, which CreditCards.com estimates comprises 98% of revolving consumer credit.

Major Holders (in billions)
Pools of securitized assets: $440.3*
Commercial Banks: $382.0
Finance Companies: $55.8
Savings Institutions: $39.0
Credit Unions: $32.2
Non-Finance Businesses:  $3.8

*Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originators.

A major factor contributing to the US credit crisis has been the value of residential mortgages, and the pressure this debt has put on to borrowers with falling home values. According to the Federal Reserve Board of Governors, the total amount of mortgage debt outstanding hit approximately $14.64 trillion by the end of 2008, up almost $4 trillion from 2004. However, the amount of US mortgage debt decreased in the fourth quarter of 2008, down almost $67 billion from the quarter before.

Breakdown of Total Outstanding Mortgages:
One- to four- family residences: $11.03 trillion
Nonfarm, nonresidential:  $2.59 trillion
Multifamily residences: $895.79 billion
Farm: $111.15 billion

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