Around 50,000 borrowers could feel a "significant strain" if interest rates rise, according to a new study by IIB Bank and the Economic and Social Research Institute (ESRI).
The study by IIB Bank chief economist Austin Hughes and David Duffy of the ESRI found that one in six mortgage borrowers and one in five people with other personal borrowings consider their debts a "heavy burden". The In Too Deep? report found that around 40 per cent of borrowers, or 800,000 people, might have to tighten their belts during 2006.
A survey of 1,700 adults found that financial stresses are the most severe for people on low incomes, but it also found that people in the €45,000-€64,000 income range have significant concerns about their rising debt levels.
"There is a group who may have overborrowed or over committed themselves to various lifestyle items," Mr Hughes said.
Debt concerns rise with age and tend to peak among people in their forties, when consumers are often "asset rich, cash poor".
The average outstanding unsecured debt reported was €6,040, an increase of almost 12 per cent on a similar survey carried out last year.
More borrowers are now concerned about their debts than last year, however Mr Hughes and Mr Duffy said this was a responsible reaction to an increase in indebtedness and rising interest rates.
"It would be much scarier if people hadn't realised they were borrowing more. They are getting more cautious about relatively modest borrowings," Mr Hughes said.
Commentators often failed to look at "the other side of the balance sheet" or the €500 billion worth of housing assets on which most consumer debt is secured, he added.
"If you look at what they have and what they owe, they are in a strong position."
The value of Irish consumers' property assets and deposit accounts exceeds their debts by around €440 billion.
"For many people, it makes sense to borrow. They are really doing the right thing by borrowing," Mr Hughes said.
"By and large Irish people don't take on debt because there is a sale on in town. Most personal debt is mortgage debt."
Some 16 per cent of mortgage holders said their repayments were a heavy burden, while 51 per cent said they were "somewhat a burden" and 34 per cent said they were no burden at all.