Nearly 20% of American families with debt have fallen behind on loan payments, according to the Federal Reserve’s 2025 Survey of Consumer Finances, marking the highest rate since 2010 even as household wealth reached new highs.
US Loan Delinquencies Hit 19.6% as Debt Burdens Rise
The latest data from the Federal Reserve showed that 19.6% of borrowing families reported at least one late loan payment in the past 12 months, a significant increase from 12.2% in 2022. More severe payment issues also became more common, with 8.2% of indebted families now at least 60 days delinquent, up from 4.9% two years earlier.
Despite these rising delinquencies, the proportion of American families carrying debt has barely changed. About 77% of families reported having outstanding debt in 2025, similar to the levels seen three years earlier. However, the cost of handling those financial obligations has grown sharply.
For indebted households, the median debt payment-to-income ratio rose from 13.4% to 15.4%. In a sign of deepening financial strain, 8.6% of all families now commit more than 40% of their income to debt repayment, compared to 6.5% previously. This represents the highest share in over a decade.
Rising borrowing costs, particularly interest rates on credit cards, have contributed to this pressure. The average credit card interest rate jumped from 14.6% in 2022 to 21.4% in 2025, making it harder for families to keep up with payments.
For lenders, the trend of increasing delinquencies raises credit risk, especially as more households carry expensive revolving debt. It also puts pressure on credit card companies and banks to consider the balance between growing interest income and the potential for increased credit losses.
| Metric | 2022 | 2025 |
|---|---|---|
| Families with late loan payments | 12.2% | 19.6% |
| Serious delinquencies (60+ days) | 4.9% | 8.2% |
| Median debt payment-to-income ratio | 13.4% | 15.4% |
| Credit card interest rate | 14.6% | 21.4% |
American Household Wealth Rises Despite Growing Financial Stress
Even as more families reported financial distress, median American household wealth continued to trend upward. Between 2022 and 2025, inflation-adjusted median net worth increased 2% to $215,900, and median family income climbed 7% to $82,200.
These gains were not evenly spread. Families in the lowest wealth quartile saw net worth decline, while older and wealthier Americans generally benefited from higher asset prices. For example, households led by someone 75 or older posted a 37% median wealth increase, but families headed by someone under 35 saw a 23% drop in net worth.
The divide illustrates that growing net worth—often due to rising home and stock values—does not always translate into more disposable income for families facing mounting debt payments. The bulk of wealth in many households remains locked up in illiquid assets, which are not easily converted to cash for debt repayment.
Mini dictionary: Federal Reserve — The central bank of the United States, responsible for monetary policy, financial supervision, and maintaining economic stability through tools such as interest rates and banking regulation.
Owning assets like real estate or stocks can boost family net worth, but it does not guarantee enough cash flow to cover monthly obligations such as mortgages or credit card bills.
What Rising US Loan Delinquencies Mean for the Economy
The rise in late loan payments raises broader concerns about the sustainability of household spending, which is a pillar of the US economy. As families devote more income to servicing debt, their capacity for discretionary spending diminishes, posing risks to retailers and businesses reliant on consumer demand.
Despite the surge in delinquencies, the Federal Reserve survey does not indicate a nationwide credit crisis. The report reflects families’ experiences over the past year rather than the most recent monthly delinquency rates.
Bankruptcy rates have also remained stable, with 1.4% of families declaring bankruptcy in the previous five years, little changed from earlier periods.
