A rising trend of borrowing for travel, gadgets, and leisure among younger Indians is reshaping household debt patterns, raising questions over financial stability and consumer priorities amid growing unsecured loans.
Indian household borrowing is increasingly being driven not by mortgages or business expansion, but by spending on travel, gadgets, leisure and other day-to-day consumption, according to reporting by The Indian Express and data cited from the Reserve Bank of India. The trend is drawing scrutiny because the fastest-growing slice of household debt is now non-housing retail credit, even as regulators say the banking system remains broadly stable.
The Indian Express reported that non-housing retail loans accounted for 58.4% of total household borrowings in March 2026, up from 54.9% a year earlier, and that outstanding loans against gold jewellery and other personal loans have risen sharply since 2022. Outlook Money and Business Standard both reported that household debt has also climbed to 45.5% of gross domestic product, underscoring how quickly retail borrowing has expanded.
The concern is not simply the size of the debt pile, but who is taking it on and for what purpose. The Reserve Bank of India has said household leverage, especially among lower-rated borrowers, needs close monitoring. At the same time, the central bank has noted that borrower quality has improved overall, with a larger share of credit held by prime-rated customers, according to Business Standard and Moneycontrol.
That improvement has not erased stress in parts of the unsecured market. The Indian Express said gross non-performing assets in unsecured retail lending stood at 1.8% at end-March 2026, up from 1.2% a year earlier, with strain particularly visible in private-sector banks. It also reported that small-ticket personal loans below ₹50,000 have grown quickly through fintech lenders, where about 70.5% of loan books are unsecured and roughly half the lending goes to borrowers under 35.
Credit bureaus and lenders say the shift reflects a much earlier entry into formal borrowing by younger Indians. The Indian Express, citing TransUnion CIBIL and Paisabazaar analysis, said the share of the credit-eligible population that is credit-active has risen to around 28% from 11% a decade ago, while consumers born after 2000 are often beginning to borrow at about age 22 through small-ticket loans and buy-now, pay-later products. Nearly half of credit-active borrowers now have consumption loans, and the number of such borrowers has risen fourfold since 2017.
The lifestyle pull behind that borrowing is visible in concert travel and discretionary spending. The Indian Express said Bank of Baroda economists estimated music concerts over the past 24 months may have generated ₹1,600 crore to ₹2,000 crore in spending, while Airbnb’s Experience-Led Travel Insights found that many Gen Z travellers now plan trips around concerts and festivals. A separate Muthoot Finance report found that more than a quarter of personal loans taken in India in the first half of 2025 were for travel, reinforcing the shift towards financing experiences with debt rather than savings.
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