Speed and simplicity in getting the loans is more important than the interest rates as the deciding factors for the consumers. According to a survey by Paisabazaar, India’s largest marketplace for consumer credit, which was conducted among more than 10,200 respondents across the country, 42 per cent of the borrowers chose the lenders primarily for quick disbursals and easy processes, while 25 per cent prioritised lower interest rates. The findings underline a clear shift in borrowers’ behaviour convenience and digital accessibility in shaping loan decisions compared to costs and interest rates.
A majority 80 per cent of the respondents said that they preferred guided digital platforms for comparing and applying for loans, with 53 per cent citing faster approvals and seamless processing as their top expectations from lenders. “The growing confidence among the consumers across segments to take personal loans not just for essential needs but for aspirations, lifestyle, and festive spends, reflects a maturing credit ecosystem,” said Santosh Agarwal, CEO, Paisabazaar. “Conversations with the consumers clearly indicate a preference for seamless digital processes that make access to credit convenient, transparent, and easy,” he added.
The survey pointed to the rising first-time adoption of festive personal loans. About 41 per cent of the respondents said that they took the loans for the first time this year, and 46 per cent indicated that they were likely to borrow again during the future festive seasons, suggesting growing comfort with short-term credit. When asked about the reasons for borrowings, home renovation and furnishings topped the list at 18 per cent, followed by shopping, gifting, appliances, and electronics (15 per cent). Other popular categories included precious metals, debt consolidation (10 per cent), and fashion and lifestyle purchases (10 per cent).
Nearly 60 per cent of the borrowers opted for loans below Rs 5 lakh, while 42 per cent preferred tenures under five years, which signals prudence, and an attempt to keep liabilities in check. According to the recent Reserve Bank of India (RBI) figures, while financial assets added between 2019 and 2025 grew by about 48 per cent, annual liabilities during the same period more than doubled, rising just over 100 per cent. In GDP terms, assets added accounted for 12 per cent of GDP. Financial liabilities, which were just below four per cent of GDP in 2019–20, climbed to 4.7 per cent in 2024-25.
The only relief lies in the fact that the liabilities fell sharply from 6.2 per cent in 2023-24, marking a 1.5 per cent dip in just one year. Which is a rare and noteworthy correction that merits deeper analysis. One possible explanation, economists suggest, lies in the “confidence factor.” As households see their wealth, particularly paper wealth from booming stock markets rise, they tend to borrow more freely, confident in their ability to repay. More importantly, as the asset values rise, they do repay, and reduce liabilities.
However, when markets correct, this confidence quickly erodes, leaving families more leveraged than they realise. The recent moderation in stock prices could therefore serve as a timely reminder about the risks of overreliance on market-linked wealth for debt decisions. It also implies that the moment the asset values turned southwards, households reduced liabilities instantly, and tried to be in sync with the current scenario. The only reason why the liabilities came down is because of the consumers’ mindset.
India’s credit ecosystem has undergone a remarkable transformation over the last few years. Rising digital adoption, instant approvals, and improved credit awareness have made personal loans more accessible than before. The Paisabazaar report reinforces this shift, portraying borrowers as more tech-savvy and confident yet still largely prudent in terms of loan size and tenure. Experts note that the focus on digital-first borrowing is likely to deepen as fintech platforms expand partnerships with banks and NBFCs. They bring speed, transparency, and competition into the credit landscape.
One can look at various factors to explain this phenomenon. There is a shift from paying EMIs to buy a house or a plot to one where families borrow to fund consumption over traditional assets. A move away from the traditional model to instantaneous consumers can create a new culture. When borrowers feel more comfortable to loan money, without any hassles, but with ease, this indicates a credit culture. There is no angst about borrowings, interest rates, or payments. The only worries are whether the loans will be available without any problems. This is both a positive, and a negative.
In a country like India, the ease of borrowing can be a classic trap. Just because the money is available, we borrow, and then use the money for things we do not need, or anticipate. As we bank on higher incomes in the future, or our abilities to pay the loans, and interest, we do not realise that things can go wrong. This is why the assets-liabilities mismatch within the Indian households is a matter of concern, not just for the policy-maker, but the society. If loans stare in our face, we need to turn it away. It is not easy. It is more convenient to accept the money that comes in, and worry later about the cash that will go out as principal and interest.
