India’s consumer finance landscape is witnessing a major shift, with UPI and small personal loans emerging as the preferred choices over traditional credit cards, according to a new TransUnion CIBIL report. The study highlights changing borrowing and spending patterns driven by digital payments and easier access to credit.
The report notes that credit cards now account for 38% of unsecured credit, compared with 56% in 2016, while small-ticket personal loans—particularly those below ₹50,000—have steadily gained market share. Despite continued growth in card issuance, credit card penetration remains relatively low across India.
Industry experts attribute this shift to the rapid adoption of UPI, simplified digital lending and changing consumer preferences. Borrowers increasingly prefer flexible, instant credit solutions that integrate seamlessly with digital payment platforms.
The findings underscore how India’s fintech ecosystem continues to reshape personal finance, with digital payments and accessible lending becoming central to everyday spending and borrowing decisions.
