Personal loan volume spikes, year-on-year growth drops in FY 2025: Report
Resorting to borrowing when the credit need arises is a typical behaviour of consumers. Be it for car, home, consumer durables or for personal needs, borrowing is the part and parcel of life of consumers everywhere.
CRIF High Mark released its annual report listing out latest trends relating to borrowing trends of Indian consumers.
The report highlights that personal loan POS grew from ₹10.7 lakh crore to ₹14.6 lakh crore over two years but year-on-year growth fell sharply from 25.2 percent in FY2024 to 9.1 percent in FY2025.
The report titled How India Lends Credit Landscape in India FY 2025 provides in depth insights into originations, portfolio and delinquency trends across major product categories.
Personal loans
When it comes to the lender type, the share of NBFCs has increased from 27.6 percent to 36.4 percent in the past two years from 2023 to 2025. During this time, the share of private banks fell from 32.5 percent to 29.2 percent. The share of PSU banks declined from 35.3 percent to 30.5 percent.
Higher value loans
The share of origination value for personal loans over ₹10 lakh has risen steadily from 28.2 percent in FY24 to 30.9 percent in FY25, indicating a growing preference for higher-value loans.
Meanwhile, the share for loans between ₹1 lakh and ₹10 lakh has declined, suggesting a shift away from mid-sized lending. Interestingly, loans under ₹1 lakh are also gaining market share in origination value, driven by the increasing adoption of digital and small-ticket lending solutions, especially by NBFCs.
Loans below ₹1L also continue to dominate in volume, increasing from 87.1% in FY24 to 89.3% in FY25.
Two-wheeler loans
The origination value of two-wheeler loans jumped from ₹99,543 crore in FY24 to ₹110,056 crore in FY25, though the growth rate moderated from 25.1 percent to 10.6 percent over the same period.
The report suggests that tighter credit policies aimed at managing default risks, along with increasing stress among sub-prime borrowers, may have influenced this slowdown.
Two-wheeler loan delinquencies increased across all lender types from Mar ’24 to Mar 2025, with PAR 31-90 percent for PSU Banks climbing from 1.27 percent to 1.61 percent and private banks rising from 3.27 percent to 3.62 percent.
Credit cards
In terms of credit cards, the share of private banks fell from 70.8 percent to 69.6 percent (active loans) and from 69.9 percent to 68.9 percent (portfolio outstanding). New card originations fell to 216.4 lakh in FY25, down 26.4 percent YoY, reversing the strong growth seen in FY22 and FY23. This follows a peak of 294.1 lakh cards that were issued in fiscal 2024, indicating a clear slowdown in momentum and tightening credit criteria.
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