How Does Debt Affect Your Mental Health?

Mental Health
How Does Debt Affect Your Mental Health?

Money is a very essential means of exchange and one that plays a major role in stress in humans. Being in debt often leaves a significant impact on your mental health especially when you’re struggling to repay. In most cases, people get anxious and nervous at the thought of having to find ways to reimburse their debts. It can be challenging to pay back what you owe which triggers psychological issues such as depression and stress.  

There are various effects debts cause on our mental processes and we will be exploring the resulting outcome in this article.

Ways Debt Affects Your Mental Health

Debt can often be challenging to repay which may generate depression and mental instability. Research data shows a connection to suicide rates due to the inability to repay debts owed by some people. Financial issues generally cause problems in families, relationships, and have a way of affecting mental health.

Here are some of the ways debt poses an issue to one’s mental health and stability. 


Our mental health matters as much as our physical health. Our cognitive abilities and motivation to perform various activities lies in our mental stability. However, it becomes difficult to perform any activity when we are stressed mentally or physically. 

Stress has a strong effect on your body and mind as it causes shrinkage in parts of the brain responsible for performance-related functions. When you worry about things like how to pay your car loan, your brain constantly goes through stress which could result in brain-related issues such as Alzheimer’s disease.

Debt and stress are pretty connected and the latter will likely occur when you find it difficult to pay your debt. Stress not only causes mental problems but also makes existing problems difficult to manage. You may begin to experience frequent mood changes and difficulty performing tasks effectively. Stress can occur in different ways either emotionally, mentally or physically. 

You may find yourself becoming easily irritated and frustrated which often leads to anger. 


Knowing you’re in debt is a major issue that can adversely affect your mental health and could result in depression. 

Depression causes cognitive and emotional problems such as mild dementia, guilt, loss of interest, thoughts of suicide and so on. These feelings make it hard and impossible to make decisions that will produce sufficient income to pay your debt and handle your personal expenses. Invariably depression affects your overall mental capacity to be productive or make prudent decisions. 

If you are depressed, you will lack the motivation or will to keep a record of certain expenses such as your loan repayment date and other issues. Depression often causes mental issues such as poor memory retention and a reluctance to do anything productive. This issue makes it even more difficult and maybe impossible to repay your loan as you might be unable to perform any task effectively to generate income. 

In some cases, you may experience manic episodes which lead to making irrational decisions on your spending expenses. When in debt you want to make sure you save enough to help you settle your debts as quickly as possible. However, depression often requires medical attention which will take a toll on your finances due to the inability to generate income while also dealing with medical bills. 

To deal with depression, people sometimes resort to imprudent spending to escape the emotional effects of depression and apprehensive feelings. Sadly, this action barely helps with your depressed state and doesn’t solve the financial issues. As a matter of fact, you will only end up incurring more debt and making it harder for you to pay your debt. Spending compulsively may end in added debt, guilt, sadness and a depressed state. 

Behavioral Changes

Managing other expenses alongside debt payments is not an easy task and can lead to a negative change in mood and an overall attitude towards things and people. You will probably begin to experience changes in your behavioral system and patterns such as loss of appetite, anxiety, nervousness and procrastination. Changes in behavioral patterns could cause some to spend imprudently leading to more debt troubles.

While you might want to improve your mood through compulsive spending, you may end up only generating more problems for yourself.

Mental and Physical Illness

According to recent data, people in debt have higher chances of committing suicide due to changes in mental patterns than those not experiences financial problems. Pressure from lenders as well as financial instability amongst other stressful patterns can generate suicidal thoughts, mood swings and mental imbalance that may require serious medical attention. 

Also constantly worrying about your financial insecurity and how to pay your debt not only affects your body but your body as well. You could experience physical issues such as frequent headaches, migraine, insomnia, and fever. All these factors will also make the body susceptible to infections and more serious illnesses. Once you are physically and mentally indisposed, it becomes nearly impossible to go to work and improve your finances. 

How To Manage Your Debt and Mental Health

Our mental health is an important aspect of our well-being. Once you begin to struggle with your mental health, other aspects of your life become difficult to manage and productivity levels begin to decrease. 

Here are some of the ways you can effectively manage your debt while maintaining a healthy life. 

Debt consolidation

Debt consolidation is arguably one of the best ways to settle your debts without hassle. It allows you to save a significant amount of money while resolving your debts for a lesser amount. By consolidating your debts, you will be able to take care of the debt causing you stress and affecting your mental health.

Debt consolidation may be the best option for those struggling to the full amount they owe. You will be able to refinance your existing debt by paying off the one you owe for another loan with a favorable interest rate. This option will allow you to work on improving your credit score as you make payments on time.

Seek Medical Assistance

If you find yourself struggling with mental health issues then you may need to see a doctor for help. Our Mental well-being is highly paramount, thereby examining your health will assist with issues you may be facing such as changes in sleeping patterns, frequent mood swings and eating habits.


There are a lot of people who go through various challenges in trying to settle their debts which affects their mental health. While debt is an inevitable burden that can be challenging, you need to ensure it does not affect your mind, body and relationships with others. 

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