Federal Reserve reports 20% of American families missed timely loan payments in 2025

The Federal Reserve reported in its 2025 Survey of Consumer Finances that about 20% of American families were unable to pay their loan installments on time.

That rate rose from 12% in 2022, marking the highest level of loan defaults recorded since the 2010 financial downturn.

The central bank found an increase in the number of families spending more than 40% of their income on debt payments.

Average income across the country rose by 7%, but the financial security of low-income families declined.

Analysts attribute the missed payments to the exhaustion of savings built up during the COVID-19 pandemic.

For Indian American households managing U.S. mortgages, auto loans, and consumer credit, the report highlights growing debt pressure across the country.