Indian Economy News

Youngsters in India start their credit journey in their 20s, shows study

A recent study by Paisabazaar reveals that Indian consumers are starting their credit journeys at a significantly younger age. The analysis, based on data from consumers who have checked their credit scores on Paisabazaar over the years and a consumer survey, shows that while those born in the 1970s typically availed their first credit product in their late 30s or early 40s, individuals born in the 1990s began their credit journey in their mid-20s. This represents an over 15-year drop in the average age of first-time credit adoption, indicating easier access and a shift in consumer mindset towards availing credit. The study also highlights a generational shift in the types of credit products used to start the credit journey. While older generations preferred secured loans like home or auto loans, those born in the 1990s typically entered the credit ecosystem via unsecured products such as credit cards, personal loans, and consumer durable loans, often by age 25-28.
The findings further indicate that home loans, traditionally accessed later in life, are now available earlier, with the average age falling from 41 (for those born in the 1970s) to 28 (for those born in the 1990s). Similarly, the average age for business loans has dropped from 42 to 27, reflecting India's growing entrepreneurial spirit and better access to MSME lending products. Consumers born after 2000 continue this trend, often starting their credit journey around age 22, primarily through small-ticket loans and Buy Now Pay Later (BNPL) products. Chief Product Officer at Paisabazaar, Ms. Radhika Binani, notes that today's young consumers are more aware, aspirational, and digitally savvy, using credit more confidently and diversely to meet life goals and lifestyle needs.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.