The consumer lending market in India is expected to a register a compound annual growth rate (CAGR) of 7.4% between 2025 to 2029 to reach $1 trillion in 2029, supported by robust economic growth, urbanization and growing consumer demand for housing, vehicles, and consumer durables, according to GlobalData, a leading data and analytics company.

GlobalData’s Global Retail Banking Analytics reveals that the consumer loan value in the India registered a growth of 27.6% in 2023, driven by rise in consumer income and evolving consumption patterns. Despite facing turbulent conditions over the past five years, India remains one of the world’s most rapidly expanding major economies. The value registered a growth of 11.5% in 2024 to reach $711.3 billion.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “India’s strong economic growth, fuelled by government investment in infrastructure and rising household investments in real estate, is contributing to the overall demand for consumer lending. Increased disposable incomes are allowing consumers to spend more on discretionary items and services, further stimulating demand for various consumer loans.”

However, global economic uncertainties, exacerbated by the US tariffs could dampen the consumer sentiment and may slowdown the growth of new loan originations for most loan products.

The Indian consumer loan market stands at $758.8 billion in 2025 – much lower than regional counterpart – China which accounted for $8.3 trillion. Overall, the APAC consumer lending market is dominated by China. It is distantly followed by Australia with $1.7 trillion, South Korea with $1.5 trillion, and Japan with $1.4 trillion in 2025.

Mortgage loans account for the largest share of consumer loans in India with 50.7% share in 2025. The segment witnessed a strong growth of 19.1% between 2020 and 2024. Affordable housing prices, an increase in the supply of residential property, and government initiatives for affordable housing, including the Pradhan Mantri Awas Yojana, have contributed to the growth of the mortgage loan market in recent years.

The personal loan market (including personal, car and all other personal loans) represents the second-largest segment, accounting for 44.7% share in total consumer loan in 2025. To boost consumer spending, in June 2025, the Reserve Bank of India (RBI) reduced repo rates from 6% to 5.5%, the third reduction in 2025. This is anticipated to decrease equated monthly instalments (EMIs) for borrowers and make new loans cheaper.

Credit card balances outstanding in India accounted for only 4.7% of total consumer loan value in 2025. The segment witnessed a strong compound annual growth rate (CAGR) of 21.3% between 2020 and 2024. The rise in credit card usage can be attributed to the improving POS infrastructure and growing e-commerce sector. Banks also offer cashback, discounts, and rewards incentivizing consumers to spend using credit cards.

Sharma concludes: “Looking ahead, the consumer lending in India is expected to continue its upward trajectory, supported by stable economic indicators at country level, expanding middle-class population, increasing urbanization, a new generation of buyers, and rising demand for consumer credit, although global geo-political situation will pose challenge for faster growth. Overall, the consumer lending market in India is expected to growth by 6.7% to reach $758.8 billion in 2025.”