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You could end up paying $160,000-plus in interest alone over your lifetime

Select calculates total interest paid on a mortgage, car loan, student loans and credit card debt.

Jovanmandic | iStock | Getty Images

If you haven't yet already, you will most likely find yourself borrowing money from the big banks at some point in your lifetime.

While having "debt" can carry a negative connotation, taking out loans leads you to all sorts of opportunities. Student loans help you finance your way through college so you can land your dream job, while a mortgage gets you in the door to your first home. Not to mention, making all these monthly bill payments on time helps boost your credit score, to ensure you can secure more financing in the future.

Despite the advantages of having access to different types of credit, however, paying interest on various loans over the course of your life certainly adds up.

Select took a look at the interest paid by consumers on loans typically taken out throughout one's lifetime. We found that the average American with a mortgage on a median-priced home, one used car payment, an average credit card balance and student loan burden can wind up paying $164,066 in just interest over their life.

This 6-digit number doesn't take into account any additional mortgages or auto loans taken out, nor other types of financing, such as a personal loan, which you may get when making home repairs or a large purchase. For this reason, the total amount of interest you pay could be even higher.

Below is a breakdown of how we calculated the total interest paid on a mortgage, car payment, student loans and credit card debt over an average American's lifetime.

Mortgage interest paid in a lifetime: $142,614.31

To calculate the mortgage interest paid in a lifetime, we used the median sales price of a new home sold in the U.S. in the second quarter of 2021, which was $374,900. Keep in mind that the interest calculation would change for those homeowners who didn't purchase their home this year.

The average APR for the benchmark 30-year fixed rate mortgage is at 2.78% at the time this article was written. Using Bankrate's mortgage calculator, we found that someone purchasing a median-priced home with a typical 20% down payment would owe $142,614.31 in interest over the 30-year life of their mortgage. This doesn't take into account any mortgage interest tax deductions that you may qualify for as a homeowner, which could lower your yearly tax burden.

How a high-yield savings can help lower how much interest you pay

Consider putting more money toward your down payment in the first place so that you can afford taking out less of a mortgage, and possibly score a lower interest rate.

A high-yield savings account like the Ally Online Savings Account is a perfect place to save up for a down payment on a home. It offers an above-average APY, no monthly fees or minimum balance requirements, plus account holders can create up to 10 different "buckets" within the same savings account that represent designated funds for certain things, such as naming one "Future Home."

Ally Bank Savings Account

Ally Bank is a Member FDIC.
  • Annual Percentage Yield (APY)

    4.25% APY

  • Minimum balance


  • Monthly fee


  • Maximum transactions

    Unlimited withdrawals or transfers per statement cycle

  • Excessive transactions fee

    $10 per transaction

  • Overdraft fee


  • Offer checking account?


  • Offer ATM card?

    Yes, if have an Ally checking account

  • Terms apply.

Auto loan interest paid in a lifetime: $5,833.38 for used car owners, $4,450.96 for new car owners

According to Experian's latest State of the Automotive Finance Market, the average new car loan in the first quarter of 2021 totaled $35,392, while the average used car loan came in at $22,375. The new car loans had an average term of 69.50 months with a 4.12% average APR while the used car loans had an average term of 65.74 months and a 8.70% average APR.

Using NerdWallet's car payment calculator, we found that the average new car owner would pay $4,450.96 in interest alone over the course of their 69.50-month loan. The average used car buyer would pay $5,833.38 in interest on their average loan. Despite the used car buyer borrowing less money for a shorter term, their interest rate is more than double the new car buyer's.

Student loan interest paid in a lifetime: $5,994.07

The average public university student borrows $30,030 to attain a bachelor's degree. Because average interest rates vary widely depending on the type of student loan you have, we used federal loan data since these loans make up about 92% of all student loans.

For the purposes of our calculation, we used this year's fixed federal interest rate for direct subsidized and unsubsidized loans for undergraduate students, which was 3.73%.

At this rate, using Bankrate's student loan calculator, we found that the average student loan borrower on a standard 10-year repayment plan will pay $5,994.07 in interest alone over the course of 10 years.

How refinancing can help private student loan borrowers

Private student loan borrowers should keep in mind that private loan interest rates are generally higher than those on federal loans. You may end up paying more in total interest. For that reason, consider refinancing your private student loans for a lower interest rate.

Earnest Student Loan Refinancing offers both low fixed and variable interest rates, flexible loan terms anywhere between 5 to 20 years, no origination fees, late fees or disbursement fees, plus a 9-month grace period if you have trouble paying back your refinanced loan. Earnest stands out especially for allowing applicants with fair credit (minimum 650 credit score) to qualify, which most refinancing lenders don't offer.


  • Eligible borrowers

    Undergraduate and graduate students, parents, half-time students, international and DACA students

  • Loan amounts

    $1,000 minimum (or up to state); maximum up to cost of attendance

  • Loan terms

    Range from 5 to 15 years

  • Loan types

    Variable and fixed

  • Borrower protections

    9-month grace period

  • Co-signer required?


  • Offer student loan refinancing?

    Yes - click here for details

Terms apply.

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.19% APR to 9.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.99% APR to 9.74% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 9.99% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

Credit card interest paid in a lifetime: $9,624.24

The average credit card balance comes out to $5,315, according to Experian's latest consumer debt study. While the average credit card APR is at 16.30% as of May 2021, according to the Federal Reserve's most recent data, for the purposes of our calculation we used a flat 16% APR.

Assuming the average credit cardholder makes a minimum payment that is calculated as 2% of their balance, using Bankrate's credit card calculator we found that it would take 376 months — or just over 31 years — to get rid of their credit card debt. In that time of making only the minimum payment, they would pay $9,624.24 in interest alone.

Of course, paying more than the minimum is a simple way to accelerate your credit card debt payoff and cut your total interest accrual down substantially. We always recommend cardholders pay their credit card bill in full and on time each month.

Get help paying off your credit card balance for good

While borrowing money to finance college or a first home is generally seen as a financially sound move, carrying a balance on a credit card is a big no-no thanks to their high, double-digit interest rates.

Balance transfer cards let you transfer your existing credit card debt to a new card with an introductory 0% APR period so you can pay off your outstanding credit card debt in a set timeframe and don't have to worry about accruing additional, costly interest charges.

For example, the U.S. Bank Visa® Platinum Card offers an introductory 0% interest for the first 18 billing cycles on both balance transfers and new purchases (after, 18.74% - 29.74% variable APR; balances must be transferred within 60 days from account opening). That's a long period of time that you can chip away at your credit card debt without it growing month over month (as long as you don't make any additional charges on the card). The 0% introductory APR applies to balance transfers made within 60 days of account.

U.S. Bank Visa® Platinum Card

Information about the U.S. Bank Visa® Platinum Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards


  • Welcome bonus


  • Annual fee


  • Intro APR

    0% for the first 18 billing cycles on balance transfers and purchases

  • Regular APR

    18.74% - 29.74% (Variable)

  • Balance transfer fee

    An introductory fee of either 3% of the amount of each transfer or $5 minimum, whichever is greater, for balances transferred within 60 days of account opening. After that, either 5% of the amount of each transfer or $5 minimum, whichever is greater

  • Foreign transaction fee


  • Credit needed


See rates and fees. Terms apply.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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