Indian households are taking on record levels of debt, driven by easy credit and rising aspirations. Personal finance influencer Neha Nagar has sparked debate after revealing that 70% of iPhones and 80% of cars in India are purchased on loans or EMIs.
Experts warn that this growing dependence on credit reflects a worrying trend — more Indians are borrowing to fund lifestyles instead of building assets. Nagar cautioned that while debt itself isn’t bad, borrowing for luxuries can trap people in endless EMI cycles.
Finance experts differentiate between “good loans” that create value — such as education, home, or business loans — and “bad loans” that fund consumption, like gadgets or vacations.
According to a media report, India’s household debt-to-GDP ratio rose from 26% in 2015 to 41.9% in 2024, with non-housing loans now forming more than half of all household borrowing. Credit-fueled spending is growing faster than income, even as savings fall to a 47-year low.
Analysts warn that unless borrowing shifts toward productive investments, India’s credit-driven consumption boom could spiral into a debt crisis.70% of iPhones, 80% of Cars in India Bought on Loan, Finfluencer Warns of Debt Trap