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Life of Interest: How Much Do People Pay in Interest Over a Lifetime

We previously worked out how much tax you’ll pay in your lifetime and it was shocking. But, we wanted to take this analysis further. What other hidden costs do we not consider in our lives?

Our credit card debts, car finances, mortgages, and even student loans will all slowly but surely grow interest fees over time. We wanted to find out what this looks like for the average American, and how it differs per state to ultimately find out how much we are paying in interest fees over our entire life. 

Key statistics:

  • The average American will pay $130,462 in interest fees over their lifetime
  • The state worst hit by interest fees is Hawaii ($272,326), followed by California ($234,337)
  • The state that spends the least on interest payments is Iowa ($93,416), almost 2.9 times less than Hawaiians 
  • Car buyers in Texas will pay the most in interest ($22,475) on their auto loans, with Massachusetts drivers paying over three times less($7,183) than Texans
  • Alaskans will pay $7,517 in credit card interest fees, the highest of any state, while Iowans will pay $3,214, the lowest in the country

How much will the average American pay in interest fees over their lifetime? 

The average American, based on averages from all states, will pay an estimated $130,461 over their lifetime in interest fees. This is based on mortgages, student loans, auto loans, and credit card debts in each state. 

Lifetime interest payments per state

Total Lifetime Interest Mortgages Auto Student loans Credit Cards

Lifetime interest payments by credit score range

Taking the same methodology as above, we applied our findings to the data to find out how much more would be paid for those in differing credit score brackets. For this, we looked at mortgages, auto, and credit card loans, but not student loans. This is because the majority (92%) of student loans are federal loans, therefore are not affected by credit scores. 

With that in mind, here is how lifetime interest differs depending on credit score.

Mortgage interest payments by credit score

Those with the best credit scores will be paying over five times less than those in the Subprime category. A conventional loan would require you to have a minimum credit score of 620. Special subprime mortgages are available for those below that threshold, but, as the chart shows, the interest rate is astronomical in comparison. 

Credit Score Interest Rate Lifetime Interest Payments
< 620 10% $486,040
620-639 3.932% $158,512
640-659 3.386% $133,828
660-679 2.956% $114,803
680-699 2.742% $105,291
700-759 2.565% $98,045
760-850 2.343% $88,388

Percentage of mortgages given by credit score range

The following is the percentage split of mortgage loans given per credit score taken from the National Mortgage Database (NMDB®). The percentages are a combined average of mortgage loans from January - October 2020. 

Very Poor Credit (300-579) Fair Credit (580-669) Good Credit (670-739) Very Good Credit (740-799) Exceptional Credit (800-850)
Very Poor Credit (300-579)0.1% Fair Credit (580-669)2.5% Good Credit (670-739)9.1% Very Good Credit (740-799)53.2% Exceptional Credit (800-850)35.0%

Auto loan interest payments by credit score

Using interest rates dictated by the following credit score ranges, we can see that those with ‘Super Prime’ credit at the top-end (781+) would pay $72,978 less than those who have 'Deep Subprime’ credit. It should be noted that it is unlikely for someone to stay consistently within ‘Deep subprime’, if for example, they were consistently paying off car loans over their lifetime. This analysis presumes no change for the sake of comparison. 

If using the average credit score per state, the national average auto loan interest rate sits at around 4.66% interest for auto loans, showing how much more money you could save by improving your credit

Credit Score Interest Rate (Used Cars) Interest Rate (New Cars) Lifetime Interest Payments*
Credit ScoreDeep Subprime (300 – 500) Interest Rate (Used Cars)20.30% Interest Rate (New Cars)14.20% Lifetime Interest Payments*$87,523
Credit ScoreSubprime (501 – 600) Interest Rate (Used Cars)16.56% Interest Rate (New Cars)10.58% Lifetime Interest Payments*$65,549
Credit ScoreNonprime (601 – 660) Interest Rate (Used Cars)10.13% Interest Rate (New Cars)6.64% Lifetime Interest Payments*$39,031
Credit ScorePrime (661 – 780) Interest Rate (Used Cars)5.59% Interest Rate (New Cars)3.69% Lifetime Interest Payments*$20,937
Credit ScoreSuper Prime (781 – 850) Interest Rate (Used Cars)3.80% Interest Rate (New Cars)2.65% Lifetime Interest Payments*$14,545

*Based on the average prices of two used cars ($21,438 ea) and four new cars ($34,635 ea) over a lifetime and respective interest rates. 

Credit card interest payments by credit score

This analysis does use the assumption that an individual would pay 2% minimum on their debts for the sake of comparison between credit score ranges, and to allow us to examine a lifetime balance. 

Most banks require a minimum credit score of 670 in order to qualify for credit cards. Credit builder cards can be a good option for those with low credit scores.

However, it is expected that those with better credit would likely pay off their monthly balance in full, therefore would not pay any interest each month. For many credit card users, this is simply not possible in their current financial situation, therefore the below figures give some indication into the huge difference in interest payments people can pay depending on their credit scores. 

Credit Cards Interest Rate Lifetime Interest Payments
579 or lower 21% $8,761
580-619 20.5% $7,984
620-659 19% $6,252
660-719 16.50% $4,411
720 or greater 13.50% $2,997

In addition, those who have a prolonged period of trying to pay down a credit card balance could see their credit score plummet further in future, affecting their next finances and interest rates negatively. 


We used data from a range of sources to analyze what the average person would pay across the following financial data points: mortgages, car loans, student loans, and credit card loans. The interest rate for these loans was dictated by the average FICO credit score in each state. 


  • Interest payments were analyzed across a 30 year period based on the assumption that an individual would have paid off their home after this time
  • Mortgage size was based on the median home value per state with a 20% down payment. 
  • Monthly payments were presumed to be equal in each instalment using an amortization schedule.

Car loans:

  • We took the average balance of auto loans in each state from 2020 
  • Interest rate was dictated by the state’s average credit score 
  • We assumed six car loans over a lifetime
  • A 20% down payment was also accounted for

Why Six cars?

Most analyses state that the average person will have 9.4 cars over their lifetime, however not every single one of these vehicles will be purchased through loans. One survey indicates that Americans will use a loan for 85% of new car purchases, and 53% of used cars, therefore we calculated 2 out of 4 used cars, and 4 out of 5 new cars would be bought through loans. 

Credit cards:

  • Credit card interest was worked out under the assumption of paying a 2% monthly minimum until cleared.
  • This was based on the average credit card debt amount per state. 
  • Based on this minimum amount, we worked out how many months it would take to clear the debt, therefore understanding how much time an individual would also be paying interest. 

Student loans (federal) were analyzed over a 20 year period at 6% interest based on the average loan debt on graduation in each state. 

Medical debt was ignored as roughly only 1 in 3 have this type of loan, therefore would not be representative of the average person. 


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