Easy Credit, Hefty Lives: Why Are Indians Increasingly Shopping on Debt?
3 mins read 04th Nov 2025
Not long ago, the dominant financial mantra in most Indian households was "save first, spend later." Major purchases, from a new scooter to a family vacation, were often the result of months, or even years, of careful saving. Today, that financial script has been flipped. We now live in an era of immediate access. The gap between aspiration and affordability is being bridged, almost instantaneously, by a wave of "easy credit" options.
This shift is powered by accessible EMI (Equated Monthly Installment) schemes, the explosive growth of "Buy Now, Pay Later" (BNPL) services, and the proliferation of instant loan apps. Together, they have created a powerful temptation: the ability to live tomorrow's lifestyle today. But this convenience comes at a cost. A new model of "credit-fuelled" consumption is emerging, prioritizing lifestyle and aspiration over long-term financial health. This post explores the drivers behind this trend, the data revealing its impact on spending habits, and what it all means for the broader market.
The Trap of 'Credit-Fuelled' Spending
The primary driver behind this shift is psychological. Easy credit mechanisms create a false, and often dangerous, sense of disposable income. When a luxury smartphone is presented not as a ₹1,00,000 purchase but as a ₹5,000 monthly payment, the entire perception of affordability changes. This is the core of the "credit-fuelled" trap. It convinces borrowers that they can comfortably afford high-end and luxury items that their actual income might not support.
This perceived financial buffer is then used to fund an expensive and curated lifestyle. We see a growing trend of individuals using various credit lines to pay for frequent weekend getaways, multiple vacations, and high-end discretionary goods. The options for zero or partial payments further fuel these choices, removing the immediate financial "sting" of a large purchase and pushing the true cost into the future.
Compounding this issue is the rise of instant loan apps. These platforms provide dangerously easy and constant access to credit, often with minimal paperwork. While sometimes used for unexpected emergencies like medical financing, they just as frequently become a revolving door of debt, used to cover other monthly shortfalls or fund impulse buys.
This entire ecosystem is amplified by two key factors: a widespread lack of deep financial awareness and the constant allure of social media. When platforms are flooded with images of a seemingly perfect, high-end lifestyle, the pressure to keep up becomes immense. The result is a credit-consumption model where aspiration, not financial health, dictates spending.
What the Numbers Tell Us: A Shift in Spending Priorities
This move toward lifestyle financing is not just an anecdote; it's a clear statistical trend. The data shows a significant shift in what Indians are borrowing for, and the scale of that borrowing is growing rapidly.
- Holidays Over Home Repairs: The purpose of personal loans is changing. It is projected that by 2025, one in every four personal loans taken will be used to fund holidays, surpassing traditional reasons like medical emergencies or home renovations.
- The Latest Gadgets on Credit: The desire for new technology is a major driver. Data from January to August this year shows that a full 25% of all iPhones sold were purchased using EMIs, loans, or credit cards.
- Financing Life's Milestones: Even major life events are being brought under the umbrella of debt. An estimated 26% of couples are now considering taking out personal loans to cover their wedding expenses.
- A National Rise in Debt: On a macro level, the trend is reshaping the entire economy. India's household debt-to-GDP ratio has nearly doubled in less than a decade, climbing from 26% in June 2015 to 41.9% by December 2024.
- Growing Financial Stress: With more borrowing comes more risk. The current size of stressed unsecured retail debt—loans with no collateral that are at high risk of default—stands at a staggering $35-45 billion (or ₹3.07 to ₹3.95 lakh crore).
Source : 
Times of India, dated 26th October, 2025
Times of India, dated 26th October, 2025
What does this mean for lenders and brands?
This massive demand has not gone unnoticed. For lenders and brands, this shift in consumer behaviour represents a significant opportunity.
The market is seeing a clear rise in credit-lending products specifically tailored to high demand for personal and lifestyle financing. The key selling point is no longer just the availability of money, but the speed of its delivery. "Instant loan gratification" is the new standard, with lenders competing to provide borrowers with larger sums of money in less time.
This has also changed marketing. Lenders and brands can now effectively capitalize on the aspirational and lifestyle values of the modern borrower. The goal is to align the product—be it a loan, a credit card, or a BNPL service—with the consumer's lifestyle goals, encouraging them to access the maximum credit possible to achieve those aspirations immediately.
Conclusion:
The landscape of personal finance in India has been fundamentally altered. The traditional model of saving for a future purchase is being rapidly replaced by a new culture of "easy credit" that delivers instant gratification. The combination of easy EMIs, persuasive BNPL schemes, and the social pressure to maintain a certain lifestyle has blurred the lines between what is truly affordable and what is merely accessible.