Financial literacy is needed - Report Says 85% Of Distressed Borrowers Spend Over 40% Income On EMIs
A recent survey of 10,000 people across India has revealed that many borrowers are struggling to manage their loan repayments because their monthly EMIs take up too much of their income. This imbalance between what people earn and what they have to pay each month is pushing them to borrow more — and, in many cases, face aggressive tactics from loan recovery agents. According to the findings, most people in financial distress are paying more than 40% of their monthly income toward EMIs — far above what is considered manageable. This means many families have too little left for basic needs like food, utilities, transport or children’s education. Because basic expenses eat up most of their money, many borrowers fall into a cycle of taking new loans or using credit cards to cover costs. Some are even forced to borrow from friends and family. The survey shows that about 65% of these borrowers have cut essential expenses — including delaying medical treatment or cancelling insurance — ju...