Unsecured lending surges as Indians borrow bigger and repay better

By Puja Sharma

Indian Consumers Gain Better Access to Credit as Unsecured Lending Strengthens: Experian Insights

• Personal Loan AUM reaches Rs. 15.9 lakh crore (+13% YoY); Credit Card AUM at Rs. 3.4 lakh crore (+9% YoY)
• Two-wheeler and Consumer Durable loan portfolios expand 18% and 16% YoY, respectively
• Fresh sourcing accelerates across products, with notable shifts towards higher ticket sizes and improved portfolio quality

Experian, a data and technology company, released its latest Credit Insights – Unsecured Loans, September 2025, offering a detailed view of India’s evolving unsecured lending landscape across personal loans, credit cards, two-wheeler loans, and consumer durable loans. The findings indicate sustained growth in unsecured credit demand, supported by stable portfolio performance and improving early-stage delinquencies across key products.

Fresh sourcing of loans in Q2 FY26 remained strong, driven by increasing ticket sizes, expanding participation from NBFCs, and strengthened borrower repayment behaviour. India’s unsecured credit environment is maturing, with lenders adopting more refined underwriting practices and consumers demonstrating healthier credit discipline. Growth in mid- and high-ticket borrowing reflects rising consumption and confidence, while improvements in early delinquencies suggest stronger portfolio resilience. These trends also highlight the impact of digital lending adoption, improved credit access in semi-urban/ Tier 3/ Tier4 markets, and a broader shift toward more structured and transparent borrowing.

Commenting on the insights, Manish Jain, Country Managing Director of Experian in India, said: “We are witnessing a meaningful shift in India’s unsecured lending space. Demand continues to rise, consumers are moving towards higher ticket sizes, and repayment behaviour is steadily improving. The improvement in early delinquencies across products shows that both consumers and lenders are making more responsible, informed choices, indicating positive trends towards a mature credit ecosystem.”

“Experian’s scores, attributes and insights offer a clear, data-led view of these shifts, helping financial institutions assess risk effectively and expand credit access responsibly. As the market evolves, we will continue to equip lenders with trusted data, advanced analytics and decisioning platforms designed to support transparency, inclusion and compliance.” he added.

Key Highlights:

 1. Personal Loans

Personal loan AUM rose to Rs. 15.9 lakh crore (13% YoY), with all lender categories—private banks, public sector banks, and NBFCs—reporting stronger fresh sourcing. NBFCs continued to expand their share, especially in small-ticket loans under Rs. 1 lakh. Average ticket sizes increased from the previous quarter, while early-stage delinquencies improved compared to last year.

2. Credit Cards

Credit card AUM reached Rs. 3.4 lakh crore (9% YoY). Fresh sanctioned limits rebounded with 13% QoQ growth after three quarters of decline, although YoY growth remains slightly negative. The top four issuers further strengthened their dominance, expanding their share from 70% to 72%. Average credit limits increased across institutions, and net 90+ delinquencies improved from 2.0% to 1.8% YoY

3. Two-Wheeler Loans

Two-wheeler loan AUM grew to Rs. 1.8 lakh crore (18% YoY), supported by a 9% YoY rise in sanctioned amounts for Q2 FY26. NBFCs maintained a strong position, aided by higher sourcing from new-to-credit customers. Higher-ticket loans in the Rs. 1–2 lakh range continued gaining traction. Net 30+ delinquencies improved from 6.2% to 5.4% YoY, although net 90+ remains elevated.

4. Consumer Durable Loans

Consumer durable loan AUM touched Rs. 1 lakh crore (16% YoY), with new loan sourcing growing at a robust 22% YoY—the fastest among unsecured products. NBFCs continued to dominate due to deep retail penetration. Loans under Rs. 20,000 made up nearly two-thirds of the volumes. Portfolio quality improved, reflected in declining net 30+ and net 90+ delinquency levels.