Young India’s Credit Revolution: Home Loans at 28, Business Loans at 27

The age at which Indians are stepping into the credit ecosystem has taken a sharp ‘younger’ turn. From home loans to credit cards, the credit journey now begins two decades earlier for the younger generation than it did for their parents, according to a new consumer insights study by Paisabazaar.

Based on an analysis of credit behaviour of over 10 million consumers, the study reveals that individuals born in the 1990s are starting their credit journeys as early as 25–28 years of age. In stark contrast, those born in the 1960s typically availed their first credit product at 47.

This 21-year gap in credit initiation across three generations reflects a deep behavioural and ecosystem shift, marked by increasing digital penetration, rising financial aspirations, and easier access to credit.

Here’s what the study finds:

Credit cards and personal loans are taking the lead

Where previous generations began their credit journeys with secured products like home or auto loans, younger Indians are diving straight in with unsecured instruments such as credit cards, personal loans, particularly the new credit options in the market like Buy Now Pay Later (BNPL) services.

Here’s how the credit entry point has shifted across generations:

1960s-born: Home loan, availed at 47 on average

1970s-born: Auto loan, typically at 39

1980s-born: Are also taking up Auto loans at 31

1990s-born: Mix of credit cards, personal loans, and consumer durable loans, usually around 25–26

Post-2000s: Small-ticket loans and BNPL products, with entry starting as early as 22

It’s not just that the products are changing; so are the purposes. The study finds that younger consumers are funding most things with ‘credit’ from smartphones to solo travel, often before they turn 30.

Home Loans and Business Loans Now Come a Decade Earlier

Another significant shift has been in the age of availing home loans. For those born in the 1970s, the average age of first-time home loan borrowers was 41. That number fell to 34 for 80s-born consumers and now stands at just 28 for millennials.

A similar pattern is visible with business loans, suggesting a rise in early entrepreneurship:

1970s-born: First business loan at 42

1980s-born: At 34

1990s-born: At 27

Gold loans, long considered an emergency financial cushion, also show signs of earlier use. It seems that the younger cohort is very comfortable with leveraging gold assets since the average first-time user age range has dropped from 52 (60s-born) to 27 (90s-born).

What is the new financial normal?

The findings of this study hint at a future where financial literacy and digital tools would bring people into the formal credit system much earlier than what has been. The youngest cohort, those born after 2000, are already showing the signs of early credit behavior.

Their first interactions with credit systems come at 22, largely through small-ticket loans or BPNL schemes. This evolving trend is not only about the younger cohort making bold financial moves, but it also shows a credit system that is perhaps getting more inclusive.