Nov 03: Dhanteras and Diwali bring a rush for gold, jewellery, electronics and big-ticket purchases. But as consumers turn to credit to fund festive aspirations, borrower counselling data reveals how easily financial commitments can spiral into a cycle of debt. Dhanteras has long been associated with buying gold, silver, vehicles and other valuables, with Diwali adding its own share of shopping, gifting and celebrations. For many Indian households, these purchases are more than just transactions; they are traditions, aspirations and symbols of prosperity. But as festive offers, easy EMIs, credit cards and instant personal loans make spending increasingly convenient, the line between celebrating prosperity and borrowing beyond one's means can become dangerously thin.
The concern is not necessarily the act of borrowing, but what happens when festive purchases become additional financial commitments for households already managing existing debt. Data based on borrower inquiries and client counselling by Expert Panel reveals a worrying pattern: 40% of borrowers are managing their existing EMIs by taking fresh loans or using credit cards. What begins as a convenient way to fund purchases or manage cash flow can gradually turn into a debt cycle, where one liability is settled by creating another. Interestingly, the reasons people borrow extend well beyond shopping and lifestyle aspirations. According to the recent data by Expert Panel 26% of borrowers took loans for medical emergencies or health issues, while 22% borrowed for family and personal expenses, including weddings and education. Another 18% cited business or job-related requirements, 15% borrowed for household and daily needs, 10% for credit card or EMI rollover and consolidation, and 9% for housing, car or asset purchases.
When the festive purchase becomes next month's financial burden
During Dhanteras, the temptation to purchase gold, upgrade a vehicle or bring home expensive electronics is often amplified by limited-period discounts and attractive EMI schemes. However, these offers can make consumers focus on monthly instalments rather than the total financial commitment. The repayment data from the Expert Panel highlights what happens when borrowers struggle to keep up. Job loss or salary reduction accounts for 31% of repayment difficulties, followed by high EMI burdens relative to income at 28%. Multiple loans or over-borrowing contribute to 19% of the reported challenges, while medical or family emergencies account for 12%, business losses 7% and high interest rates or penalties 3%. This suggests that even a seemingly manageable additional EMI can become difficult to sustain when an unexpected expense or income disruption enters the picture.
The real price of easy credit
The consequences can extend beyond financial pressure. Expert Panel's data indicates that 35% of borrowers have faced some form of recovery harassment, while 17% reported severe harassment, including threats, abusive calls and home visits. Further, 20% of borrowers had received legal notices from lenders. Among the reported recovery experiences, 39% involved recovery calls or abusive language, 28% involved frequent calls from multiple lenders, 11% included home or workplace visits and 8% involved threats of legal or police action. Only 14% reported not having faced harassment yet.
The data also captures the intensity of these experiences: 42% of reported severe harassment instances involved continuous or excessive calls, 38% involved threats or intimidation, 32% included home or workplace visits, 27% involved abusive language and 11% involved social or reputational harassment.
A Diwali of prosperity should not come with a repayment hangover
Commenting on the growing concerns around borrowing and repayment behaviour, Anurag Mehra, Director of Expert Panel, said,
"Festivals like Dhanteras and Diwali naturally encourage people to make purchases they have been planning throughout the year. However, the growing availability of instant credit and easy EMIs can sometimes make consumers overlook their actual repayment capacity. Our counselling data shows that 40% of borrowers are already relying on fresh loans or credit cards to manage existing EMIs. The festive season should be about celebrating prosperity, not creating financial commitments that become difficult to manage in the months ahead. Consumers must distinguish between what they can afford and what credit allows them to buy."
As the festive shopping season gathers momentum, consumers must look beyond attractive discounts and zero-cost EMI pitches. Setting a spending limit, evaluating existing liabilities and avoiding fresh borrowing to service old debt can make a significant difference. After all, Dhanteras is celebrated as a day of prosperity. And prosperity should ideally mean stronger financial security, not a shopping spree that leaves households counting EMIs long after the diyas have gone out.
