Mumbai: Indian households are facing mounting financial pressure as personal debt continues to surge while savings steadily decline. Recent data from the Reserve Bank of India and a nationwide financial survey show that household borrowing has nearly doubled over the past decade, signaling a worrying trend for the country’s economy.
The rapid spread of Buy Now, Pay Later services, instant loan apps, easy credit cards, and EMI-based purchases has made borrowing effortless. As a result, many families are now spending beyond their actual income, creating a deep-rooted EMI-dependent lifestyle, especially in urban areas.
What the Survey Reveals
- Nearly 85% of borrowers spend over 40% of their monthly income on EMIs.
- People earning between ₹35,000 and ₹65,000 per month are paying ₹28,000–₹52,000 only towards loan instalments.
- About 40% are using one credit card to clear the bill of another.
- 72% complain of harassment by recovery agents.
- 67% receive 50–100 recovery calls every month.
Impact on Daily Life
The growing debt burden is forcing families to make painful compromises. Many are cutting down on children’s education expenses, postponing medical treatment, cancelling insurance coverage, and even reducing basic food consumption.
To survive the pressure, 16% are taking salary advances, 15% are selling personal assets, and 8% are pledging gold jewellery.
Warning from Experts
Financial analysts caution that an EMI-driven lifestyle is unsustainable and could have long-term consequences not only for households but also for the nation’s financial stability.
Also read: Indian Economy: Higher Imports Drive Wider Trade Deficit in December
Message from financial Advisers:
Experts say that living a comfortable life is important, but not at the cost of heavy loan burdens. They advise people to “save first, spend later,” and to use only about 25% of their income or savings on non-essential and luxury expenses. Financial planners also stress the importance of maintaining an emergency fund, so that unexpected costs do not push families into debt. According to them, strong savings habits are the key to long-term financial security.
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