Rising Trend of Personal Loans in India
In recent years, the trend of availing personal loans has significantly increased among consumers in India. A recent report reveals that individuals are borrowing more than ever, resulting in a record high personal loan amount of ₹55.3 lakh crore. This surge can be attributed to the increased reliance on credit cards and gold loans, which have collectively driven a 14% boost in personal loans.
Key Findings from Recent Reports
According to a report from the Reserve Bank of India, there was a notable 14.4% increase in personal loans in July alone, marking a milestone in borrowing practices. This growth highlights the changing financial behavior of people, who are now borrowing judiciously to fulfill their personal aspirations.
| Loan Type | Year-over-Year Growth | Total Loan Amount (in ₹ Crore) |
|---|---|---|
| Personal Loans | 14.4% | 55.3 lakh |
| Gold Loans | 39% | Data Pending |
| Credit Card Loans | Data Pending | Data Pending |
Rise in Credit Card Debts
Amidst this trend, the report also highlights a concerning increase in credit card debts. More users are accruing outstanding balances, revealing an alarming growth of 22% in year-over-year credit card debt, which now stands at nearly ₹2.8 lakh crore. This hints at a potential risk for many borrowers who may struggle to clear their dues.
Spending Patterns with Credit Cards
In a report released by SBI Securities, it was found that Indian credit card holders spent around ₹1.7 lakh crore in July. This represents a remarkable 19% increase compared to the same month last year. In terms of transactions, the data shows that in July alone, there were approximately 38.4 crore transactions made using credit cards, a staggering 39% increase from the previous year.
Surge in UPI Transactions
Additionally, there has been a significant boost in transactions via the Unified Payments Interface (UPI). August 2024 witnessed a 41% year-over-year increase in UPI transactions, reaching a record of 14.96 billion transactions. The overall transaction volume amounted to ₹20.61 lakh crore, marking a 31% rise compared to the previous year. This reflects the growing inclination among consumers to adopt digital payment methods as a convenient alternative.
Final Thoughts
The continuous rise in personal loans, credit card debt, and digital payment transactions underlines a transformation in the financial behavior of Indian consumers. While personal loans provide flexibility and convenience, it is crucial for borrowers to manage their debts effectively to avoid financial strain. Monitoring spending habits and seeking professional advice when necessary can help individuals make informed financial decisions.
