Borrowers struggle with minimum debt payments

A recent study from Freedom Debt Relief highlights a growing trend of borrowers being unable to make progress on their unsecured debts. Among 1,800 surveyed individuals carrying at least $10,000 in unsecured debt, 28% reported being able to afford only the minimum required payments.

Financial pressure is particularly acute among younger generations. The survey found that 36% of Gen Z borrowers and 34% of millennials reported being limited to making only minimum monthly payments. Many of these individuals are already making significant budgetary sacrifices to remain current, yet find that high interest rates prevent them from reducing their principal balances.

When borrowers fall behind, debts may be sent to collection agencies. While this increases pressure through frequent communication and urgent demands, debt collectors are subject to legal limits regarding their recovery practices.