According to credit bureau CRIF Highmark, Gen Z's consumption credit portfolio expanded to reach ₹14.7 trillion in May 2026, up 23.8% year-on-year. Notably, this borrowing is predominantly driven by unsecured debt, which includes personal loans and credit cards that account for 71% or ₹10.9 crore of their total active loans. As reported by Mint, this represents a fundamental shift from traditional views of personal loans as emergency financing tools to routine credit instruments.
According to Kotak Mahindra Bank's Amit Pathak, younger borrowers are using personal loans to fund once-in-a-lifetime events rather than liquidating market assets. As reported by Mint, Pathak notes that today's younger, affluent borrowers use personal loans to fund experiences like travelling to see the 'New Zealand moon' or participating in a London marathon, explaining that they don't want to disturb compounding returns and avoid capital gains tax implications. The strategy involves borrowing short-term to protect compounding returns while maintaining investment portfolios intact.
Data from CIBIL's Beyond the Swipe 2026 report reveals that 31% of Gen Z consumers already have two or more open credit accounts at first card origination. According to the report cited by Mint, 18% hold an open consumer durable loan and 23% hold an open small-ticket personal loan at first card opening. This demonstrates the widespread adoption of credit products among younger consumers seeking to fund lifestyle choices and experiences.
Despite increased borrowing, CRIF Highmark data shows that Gen Z's delinquency rate (PAR 31–180) has declined to 2.7% as of May 2026, outperforming the overall consumption loan portfolio. As reported by Mint, this discipline is attributed to rising salaries in technology and AI ecosystems that provide surplus income, giving younger consumers confidence in debt repayment. Industry experts emphasize the psychological aspect, with many Gen Z investors becoming highly possessive of their portfolios and using EMI payments as 'good pressure' to control spending.
According to Ladder7 Financial Advisories' Suresh Sadagopan, borrowing can become problematic if loan costs exceed underlying investment returns. As reported by Mint, he warns against using credit cards for purchases without proper repayment planning, noting that failing to pay off loans can result in interest rates of 36% to 48%. Industry experts emphasize the importance of pacing purchases, evaluating credit card EMI options, and investing in travel insurance to maintain financial discipline while enjoying experiential lifestyle choices.
