- How much debt does the average Australian have
- Can you consolidate multiple loans?
- What are some strategies to reduce debt?
- Frequently Asked Questions
Financial debt is a reality for many Australians. Whether it’s getting a mortgage, home renovations, starting a business or covering unexpected expenses, borrowing money has become a financial tool used by many Aussies. There are many ways to handle debt if you feel like it’s getting out of control, like a debt consolidation loan. But how much debt does the average Australian have? We’ll explore both consumer and mortgage debt so you can find out where you stand.
How much debt does the average Australian have?
In Australia, according to an independent Finder study, the average household debt is $261,492, made up of mortgage and consumer debt. Of course, most of that debt is in the form of mortgages, so to get a clearer picture of consumer debt, we need to remove property from the equation.
The average consumer debt (excluding mortgages)
Consumer debt refers to any type of personal debt that is not connected to a home loan. Consumer debt is usually taken out to purchase goods or services that do not appreciate in value and are often purchased for short-term use. The average Australian consumer debt is:
- Credit card debt: $3,306
- Personal loans: $8,098
- Car loans (can be short or long term): $13,315
- Buy now, pay later (BNPL) services: $867
It is important to manage your consumer debt responsibly as these types of loans are labelled as “bad debt” by credit reporting bodies. Consumer debt is considered to be bad debt because the goods or services purchased using this debt often depreciate over time and are usually attached to higher interest rates.
Creating a budget can help you stay ahead of your repayments and to meet your repayments when they are due. A budget allows you to track how much money you need to have allocated for debt repayments.
What is the average mortgage debt?
According to the latest Australian Bureau of Statistics (ABS) data, the average home loan debt is $665,978. This reflects the ongoing growth in property prices and the larger loans that buyers are taking on to enter the property market.
The price of new builds is typically tied in with the current market prices, which means that first-home buyers(or those who are building) have to borrow more, compared to buyers who purchased years ago. The average home loan debt is affected by owners who purchased their properties for a lower purchase price and who may have locked in their interest rates at a lower rate.
Can you consolidate multiple loans?
If you have multiple smaller consumer loans, such as credit card debt or small cash loans, one way to stay on top of your repayments is with a debt consolidation loan. Debt consolidation combines multiple loans and debts into a single easy-to-meet repayment.
Instead of keeping up with multiple due dates and varying amounts, debt consolidation simplifies things by combining all your debts into one single loan and repayment, with the same amount due each repayment cycle.
What are some strategies to reduce debt?
You can reduce your debt by taking small, manageable steps that help you take back control of your finances. You don’t need to be an expert – just a few smart habits can make a big difference over time such as:
- Create a budget to track your income and expenses (such as utility bills), helping you understand where your money is going and where you can cut back.
- Pay more than the minimum on your debts when you can, especially those with high interest.
- Focus on one debt at a time, using strategies like the snowball (paying off your smallest debt first) or avalanche (paying off your highest interest debt first) methods.
- Avoid taking on new debt unless it is essential or an emergency.
- Avoid big-ticket purchases where possible, until you have paid off your debts.
- Look for extra income, such as freelance work, a side hustle, or selling unused items.
- Cut non-essential spending, like dining out, ordering in, or subscription services you rarely use.
Take control of your debt with Red Tree Finance
By adjusting your habits and putting together a solid plan, you can steadily reduce your debt and gain more control over your financial future. If you’re looking for a way to streamline your debts into one simple repayment, consider a debt consolidation loan. It can be a great way to make sure you never miss a repayment, and it’s possible to pay less interest over the lifetime of the loan. If you have any questions or need more information, feel free to contact our dedicated team.
Frequently Asked Questions
What is the average debt of an Australian?
The estimated average debt of an Australian is approximately $21,413 in personal (consumer) debt. Some examples of common consumer debts include:
- Credit card debt
- Personal loans
- Car loans (can be short or long term)
- Buy now, pay later (BNPL) services
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How much does an average Australian have in savings?
According to Money.com.au, in 2025, the average Australian has $46,825. This amount does vary between the different generations and is heavily influenced by the older demographics.
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The information provided in this blog is of a general nature and is provided without considering your specific objectives, financial situation, or needs. It is intended for informational purposes only and should not be relied upon as financial, investment, or other professional advice.
Before making any financial decisions or taking action based on the information presented, you are strongly encouraged to assess its appropriateness in light of your individual circumstances. Red Tree Finance does not intend to provide personalised financial advice, and you should seek independent financial, legal, tax, and other relevant advice tailored to your unique situation.