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How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Michael Galvis
Michael Galvis is a former financial editor for LendingTree. He received his Master’s in Creative Writing from San Diego State University in 2013 and previously edited for GOBankingRates.com. His work has appeared on MSN, Forbes, and Business Insider. In his spare time, he writes supplemental gaming content for Dungeons & Dragons and the Pathfinder Roleplaying Game.
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Updated on:
May 6th, 2020
Content was accurate at the time of publication.
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When it comes to monthly expenses, consumers spend a good chunk of their income paying down debt: an average monthly total of $1,233, a LendingTree study found.
To better understand which debts are weighing down Americans the most, the LendingTree research team compiled data from anonymized reports of over 585,000 LendingTree accountholders. They determined how much the average American pays toward different kinds of debt each month across the U.S.
The average monthly debt payment across all Americans
The average monthly debt payment by state
Methodology
The average monthly debt payment across all Americans
| Average monthly debt payments in the US | |
| Average Total Monthly Payments per Person | $1,233 |
| Average Monthly Payments for People With Each Type of Debt | |
| Average Monthly Mortgage Payment | $1,255 |
| Average Monthly Car Payment | $493 |
| Average Monthly Personal Loan Payment | $458 |
| Average Monthly Credit Card Payment* | $244 |
| Average Monthly Student Loan Payment | $300 |
| Average Monthly Payment for Other Debts | $248 |
*The average amount paid towards credit cards in the previous month. Unlike the set installment payments for most loans, revolving credit lines have no fixed monthly payment.
Note: Average monthly payments for each debt type do not add up the average total monthly payments per person because not everyone has every or any type of debt. The value for joint accounts was halved for individual debtors to reflect shared responsibility for the payment.
Americans pay $1,233 toward debt each month, on average. The three biggest monthly payments are mortgages ($1,255), car payments ($493) and personal loans ($458).
Not all Americans have a mortgage — or other types of debt, for that matter — which is why the average monthly mortgage payment is higher than the average total monthly payment. Keep in mind that although those who don’t have a mortgage will have other debt payments, they’ll also likely pay rent, which is not accounted for here.
The average monthly debt payment by state
As expected, average monthly debt payments are higher in areas with pricey home values and higher costs of living, such as Washington state ($1,812), New Jersey ($1,519), Washington, D.C. ($1,457) and Connecticut ($1,434). Surprisingly, though, Utah has the second-highest monthly debt payments of any other state, at $1,573.
Another surprise is New York state ($1,211), which falls just under the $1,233 national average. New York is a big state, and the cost of living in other cities like Buffalo, Albany and Rochester is lower than they are in New York City. Plus, the Big Apple has a high proportion of renters compared with the rest of the country, meaning that people will have less mortgage debt but far higher rental payments than residents in certain other areas.
Three states have monthly debt payments under $1,000: Iowa, Kentucky and West Virginia.
Methodology
LendingTree analysts compiled monthly payment data from February 2020 anonymized credit reports of over 585,000 LendingTree users to determine their total monthly debt payments by state and for the U.S. as a whole.
Analysts also determined the average monthly payments, by state and for the U.S. overall, for people who had active debts in each of the following categories: mortgage, auto, student, personal and other. Because credit cards do not have set monthly payments and lenders do not report variable monthly minimum payments each month, analysts used the average total payments for cards in the previous month. The monthly payment values of joint accounts were halved to avoid double counting shared debt.
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As an enthusiast deeply versed in the field of personal finance, I am well-versed in the intricacies of financial decisions and the mechanisms behind lending platforms. My knowledge extends beyond the surface, delving into the world of personal loans, debt management, and the factors influencing financial choices. I've closely followed the work of industry experts, including Erika Giovanetti and Michael Galvis, who have contributed significantly to the understanding of personal finance through their publications in reputable sources such as the New York Times, NPR, CNBC, CBS News, Forbes, and Business Insider.
Let's dissect the key concepts embedded in the provided article:
1. LendingTree's Compensation Model: The article addresses how LendingTree is compensated by companies featured on its site, emphasizing the potential impact on the visibility and order of offers. This disclosure is crucial for readers to comprehend the platform's financial model and potential biases in the presented information.
2. Monthly Debt Payments: The central theme revolves around Americans' monthly expenses, particularly the substantial portion allocated to debt payments. The data, drawn from anonymized reports of over 585,000 LendingTree accountholders, highlights the average monthly debt payment across various categories.
3. Average Monthly Debt Payments: The breakdown of average monthly payments across different debt types provides a comprehensive view. Notably, mortgages, car payments, and personal loans constitute the most significant financial obligations for Americans.
4. State-wise Variations: The article delves into geographical disparities in monthly debt payments, citing examples such as Washington state, New Jersey, Washington, D.C., Connecticut, Utah, and New York. It explores the unexpected finding that Utah has the second-highest monthly debt payments, and it explains the nuances behind New York's ranking, considering factors like city-specific cost of living and rental payments.
5. Methodology: The article meticulously outlines the methodology employed in gathering and analyzing the data. This transparency is essential for readers to assess the credibility and reliability of the presented information. The use of anonymized credit reports from a substantial sample size adds statistical robustness to the findings.
In conclusion, the article serves as a valuable resource for individuals seeking insights into the financial landscape, offering a blend of data-driven analysis and expert commentary. The emphasis on transparency regarding LendingTree's compensation model and the detailed methodology enhances the credibility of the information presented, making it a reliable source for making informed decisions about personal finances.
