As the festive season picks up, new data highlights how stretched Indian household budgets already are. According to figures shared by Expert Panel, a debt and loan resolution platform, around 60% of borrowers have EMIs that either exceed or nearly equal their total monthly family income. Even more concerning, 40% are taking fresh loans or using credit cards just to keep up with existing EMI payments.
The borrowing is not all discretionary. Medical emergencies account for 26% of cases, making health the single most common reason people take on debt. Family and personal expenses, including weddings and education, make up another 22%. Business needs or job-loss situations account for 18%, while everyday household expenses contribute 15%. These numbers suggest that a large share of borrowing is driven by necessity, not festive shopping.
The trouble deepens when income drops or an unexpected expense hits. Job loss or salary cuts were cited in 31% of cases where borrowers struggled to repay. A high EMI-to-income ratio was a factor in 28% of cases, and holding multiple loans accounted for 19%. Medical or family emergencies contributed to another 12%.
The pattern of using new credit to service old debt is particularly risky. A fresh loan may cover an immediate shortfall, but it adds another repayment obligation to an already tight budget. Over time, this cycle becomes harder to break.
With festive-season discounts and easy credit making spending more tempting, the data is a reminder that the instalment may look small on its own but lands on top of commitments many households are already struggling to meet. Loan repayments continue long after the celebrations end.
Source: India Today
