Household debt and delinquency decline in Brazil, but burden grows

Fewer Brazilians are in debt or behind on payments, but more income is going toward loan repayments, according to trade association CNC

02/07/2025

---

The share of indebted and delinquent consumers declined in January, according to the Consumer Debt and Delinquency Survey by the National Confederation of Commerce of Goods, Services, and Tourism (CNC). However, the portion of household income dedicated to debt payments increased, reaching its highest level in eight months.

The percentage of households reporting debt fell from 76.7% in December 2024 to 76.1% in January 2025. This figure was also lower than 78.1% in January 2024.

The share of households with overdue debt stood at 29.1% in January, slightly down from 29.3% in December, though still above 28.3% in January 2024. Among those unable to repay their loans, the proportion dropped to 12.7%, compared to 13% in December, but remained higher than 12% in January 2024.

Meanwhile, the share of household income allocated to debt payments reached 30% in January, up from 29.8% in December, marking the highest level since May 2024 (30.1%).

Another notable trend was the increase in consumers who consider themselves “heavily indebted”, which rose to 15.9% in January, the highest level since September 2024.

“High interest rates and tighter credit availability are leading consumers to take on fewer new debts. However, as an unintended consequence, they feel an increased burden from their existing obligations,” said José Roberto Tadros, president of the CNC-SESC-SENAC System, in a statement.

“The slight improvement in delinquency rates suggests that Brazilian households have been making an effort to balance their finances. However, the growing share of income committed to debt payments is a warning sign for the economy in 2025,” he added.

Despite the recent improvement in debt and delinquency indicators, the CNC cautioned that household debt levels could rise again throughout the year. The organization projects that by the end of 2025, 77.5% of Brazilian households will be in debt, with 29.8% classified as delinquent.

“The combination of increased reliance on credit for consumption and persistently high interest rates will make financial management even more challenging for Brazilian consumers,” said Felipe Tavares, economist at CNC.

In January, credit cards remained the most widely used form of consumer credit, accounting for 83.9% of total debt holders, CNC noted.

*By Alessandra Saraiva, Valor — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/