$300K for What?! Why Americans Shell Out So Much Interest

$300K for What?! Why Americans Shell Out So Much Interest

Do you, by any chance, have $280,000 handy?

That's how much the average American will need in order to cancel out the interest payments they accrue over their lifetime.

Believe it or not, that pales in comparison to some Americans' burden. According to research by Credit.com, consumers could pay considerably more in interest, depending on their credit score and mortgage size.

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Of course, larger mortgages yield higher interest payments, so totals tend to be lower in states where housing is cheaper. And those with lower credit scores typically pay higher interest rates on loans.

Credit.com calculated average interest rates across the U.S. based on a 30-year mortgage, an average car loan balance of $22,750, and 40 years of revolving credit card debt.

According to their findings, D.C. residents are the most unlucky—and pay a whopping $451,890 over their lifetimes. That figure takes into account an average new mortgage balance of about $462,000 and an average credit score of 656, which is slightly below the U.S. average of 687.

On the other hand, Iowans pay the least in interest—just $129,394—because of their less expensive housing costs.

Aside from moving to an area where housing is more affordable, one impactful way to decrease your interest payments is to increase your credit score. Check out our guide to boosting your number here.

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