EMIs Eating 60% of Income? Your Debt Red Flags

Indian household debt has crossed 45.5% of GDP. Young salaried Indians are borrowing the most, and many are spending up to 60% of their income repaying EMIs — leaving almost nothing for savings or emergencies.

Here's what happened: India's household debt has crossed 45.5% of GDP, with young salaried professionals borrowing at the fastest pace ever recorded.. Easy digital credit — instant personal loans, BNPL apps, and pre-approved credit cards — has pushed many borrowers' EMI burden to 60% of monthly income.. High-interest unsecured debt (personal loans at 16–36% p.a.) is the fastest-growing category, leaving little buffer for savings, emergencies, or investment..

What you should do: Calculate your Debt-to-Income ratio right now: add ALL monthly EMIs, divide by take-home salary — if the result is above 0.40, you are in the danger zone and need a repayment plan immediately.. List every active loan by interest rate and tackle the highest-rate debt first (credit cards and personal loans before home loans) — this is the avalanche method and saves the most money.. Avoid stacking new BNPL or personal loans until your EMI-to-income ratio drops below 35% — each new line of credit also pulls down your CIBIL score through hard enquiries..

Pro tip: RBI's guidelines suggest lenders assess a borrower's Fixed Obligation to Income Ratio (FOIR) — if yours exceeds 50%, most banks will reject your next loan application anyway, so fix it before you need credit urgently.