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 — just to keep up with loan payments. Others have taken salary advances or sold assets like gold or property to cope.

Harassment by Loan Collectors

Alarmingly, many borrowers report being harassed by recovery agents when they are unable to pay on time:

  • 72% said they experienced some form of harassment.

  • 67% received repeated phone calls — often including threatening or abusive messages.

  • Some faced home or workplace visits from agents, and a few were even threatened with legal action.

Calls and messages sometimes come at inconvenient times, like early morning or late evening — outside the hours that lenders are supposed to contact borrowers. Many borrowers receive multiple calls every day, including SMS and WhatsApp messages.

Recovery agents have also been reported to contact borrowers’ family members, neighbours, or even their workplaces, which adds pressure and embarrassment for the borrowers.

If possible, Neither a borrower, nor a lender be! 

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