A recent nationwide survey by debt resolution firm Expert Panel, covering 10,000 financially distressed borrowers between June and December 2025, has revealed a growing household debt crisis gripping India. The findings show that 85% of respondents are spending over 40% of their monthly income on EMIs, leaving little for essential expenses. This situation has turned easy access to credit into a persistent burden rather than occasional relief.

Many borrowers, particularly those earning between ₹35,000 and ₹65,000 monthly, find themselves committing ₹28,000 to ₹52,000 towards repayments each month. As salaries get consumed by EMIs almost immediately, families are forced to adopt desperate measures. Around 40% rotate credit cards to cover expenses, while 22% turn to friends, family, or informal lenders for support, often leading to fresh loans just to service existing ones.

The strain has pushed households to sacrifice necessities. About 65% reported cutting back on essentials such as education, medical care, insurance, and nutrition. In extreme cases, 16% took salary advances, and 15% liquidated assets including gold, stocks, or property. These actions offer short-term relief but erode long-term financial security and leave families vulnerable to future emergencies.

Also Read: Your Retirement Fund May End Up Funding Your Parents’ Old Age

Recovery pressure adds another layer of distress. Seventy-two percent of borrowers faced harassment from recovery agents, including abusive calls outside permitted hours, frequent threats via SMS or WhatsApp, and in some cases home or workplace visits. Eighteen percent said family members were contacted, and 12% reported workplace intervention, leading to public shame and professional damage.

The emotional toll is significant, with over half reporting anxiety, depression, sleep issues, marital conflicts, and reduced work performance. The survey highlights systemic issues in the credit ecosystem, including inadequate affordability checks, aggressive recovery practices, and low borrower awareness of rights. Experts call for urgent reforms such as stricter regulation, interest rate caps, and better financial literacy to prevent further escalation of this silent crisis.