Brazilian families spend 28% of their income on debt payments

Currently, Brazilian families spend 27.8% of their monthly income on debt repayments and interest. According to data from the Central Bank, 9.86% of this total goes to interest payments.

The percentage of income allocated to paying off debts in Brazil is practically triple the average for 17 developed countries, according to data from the Bank for International Settlements (BIS).

In the United States, about 8% of household income goes toward paying off debt, while in Japan the average percentage is 7.8%.

High interest rates weigh on debt repayment

Furthermore, in Brazil, of the total percentage (27.8%), only 2.13 percentage points are low-interest debts, such as those for real estate purchases, for example. The remaining 25.67% are debts contracted at higher interest rates, such as those for payroll loans and credit cards.

Central Bank data also shows that the burden of interest payments on household budgets peaked in 2023, with a reduction in 2024, and a new increase this year, as credit provision expanded.

This year, with interest rates above 14%, the government approved a program to grant private payroll loans to workers with formal employment contracts (CLT).

Private loans have higher interest rates than those for retirees and public servants

As shown by Gazeta do Povo , the Workers' Credit program could bring, among other things, the trap of family debt at not-so-low interest rates.

According to a report on private loan lending released by the Ministry of Labor on July 25, the program had already lent nearly R$21 billion since its inception on March 21. The loans were made to more than 4 million workers.

The interest rates, which averaged 3.79% per month until July, are still higher than those for loans to retirees (1.83% per month) and public servants (1.84% per month) recorded in the same period.