Personal lending in India is undergoing a structural shift as younger and affluent borrowers increasingly use credit as a planned financial tool rather than only as a source of emergency funding. The trend is being driven by experience-led spending, greater financial awareness and the growing adoption of artificial intelligence (AI)-based underwriting by banks. Amit Pathak, Business Head – Personal Loans at Kotak Mahindra Bank, said changing borrower behaviour and AI-led underwriting are reshaping the personal lending market, with customers seeking faster, seamless and flexible access to credit while banks strengthen risk assessment and fraud detection.
Younger consumers, including Gen Z and first-time earners, are increasingly borrowing for travel, weddings, lifestyle purchases and other milestone experiences. At the same time, greater awareness of credit scores and repayment discipline is encouraging borrowers to avoid excessive loan stacking and maintain healthier credit profiles. Banks are also deploying AI and machine learning to analyse larger volumes of data, improve default prediction, strengthen fraud detection and enable more granular credit assessment. However, lending decisions continue to involve human oversight, with models tested and refined before wider deployment.
In Kolkata, the trend could gain traction among younger salaried professionals and affluent consumers as digital lending expands and planned spending on travel, lifestyle and major personal milestones rises. Flexible credit lines may also appeal to investment-oriented borrowers seeking liquidity without prematurely liquidating assets, supporting a broader shift towards strategic credit use.