Summary of this article
Young borrowers aged 30 or below account for 43 per cent of two-wheeler loans.
Two-thirds of two-wheeler borrowers take another credit product within three years.
Gen Z and younger millennials are entering the car loan market.
Young Indians are entering the vehicle loan market at different stages of their financial lives, from financing their first scooter or motorcycle to upgrading to a car. For many, a two-wheeler loan is also an early step into formal credit, opening the door to personal loans, credit cards and other borrowing options later.
A report by TransUnion CIBIL, titled Shifting Gears 2026: Credit Drives Today’s Mobility, has found that borrowers aged 30 years or below accounted for 43 per cent of new two-wheeler loan originations in the first half of 2026. Young buyers are also entering the car loan market, with Gen Z and younger millennials among the first-time car borrowers.
Two-Wheeler Loans Give Young Borrowers A Credit Entry Point
The two-wheeler loan segment is a major component of the retail lending market in India. The report has shown that the outstanding balance of two-wheelers was Rs 1.76 lakh crore in June 2026, which was 3.2 times higher than the balance in June 2019.
A large portion of these new loans went to young borrowers. Of the loans taken in the first two quarters of 2026, about 64 per cent of two-wheeler loan takers were in semi-urban and rural areas.
However, these loans are no longer limited to people entering the credit system for the first time. The report found that 39 per cent of borrowers taking two-wheeler loans in the first half of 2026 were first-time borrowers, down 19 per cent from the share in the first half of 2019. Meanwhile, the share of borrowers with more than two years of credit history rose to 43 per cent.
"For two-wheeler specifically, the new to credit [borrower base] has come down, which means that six out of the 10 loans which are happening on two-wheeler are established credit borrowers. Before they come and take a two-wheeler loan, they're actually taking a consumer durable or a phone financing," said Bhavesh Jain, MD and CEO, TransUnion CIBIL.
For young consumers, this means lenders are also serving people who already have experience with other credit products.
Two-Wheeler Loans Can Lead To More Borrowing
A first vehicle loan can be followed by other forms of borrowing. The report has found that 68 per cent of consumers who took two-wheeler loans in the second half of 2022 had taken another credit product by the second half of 2025.
Among borrowers aged 18-35 years, the share was higher at 71 per cent. Consumer durable loans were the most common subsequent product, taken by 41 per cent of borrowers. Personal loans above Rs 50,000 followed at 21 per cent, while 14 per cent obtained credit cards.
This progression makes repayment discipline important from the beginning. Missing instalments can impact a borrow
Young Buyers Are Moving Towards Car Loans
The report found that 37 per cent of passenger vehicle loan originations in the first half of 2026 went to first-time car borrowers. Core Gen Z, and younger and core millennials accounted for a significant share of this group.
Another 11 per cent of car loan originations went to borrowers moving from two-wheelers to cars. Among these borrowers, 44 per cent were aged 26-35 years.
“About 11 per cent of the new auto loans which have been taken are essentially [those] who are graduating from two-wheeler loans... and about 7 per cent of them essentially are graduated customers who already had service, basically two-wheeler loans as well,” noted Jain.
The average sanctioned loan for a passenger vehicle for the first half of 2026 was Rs 8.2 lakh, highlighting the fact that consumers must carefully consider the monthly instalments, interest rates and the loan duration before opting to buy a vehicle.
