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40% of Stressed Borrowers Use New Loans to Pay Old EMIs: What Can Go Wrong?
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Moneycontrol•22-09-2026, 15:07
40% of Stressed Borrowers Use New Loans to Pay Old EMIs: What Can Go Wrong?
- •A new report reveals 40% of stressed borrowers use fresh loans or credit cards to manage existing EMIs, highlighting a dangerous debt cycle.
- •Another 60% of these borrowers reported EMIs nearly equal to or exceeding their total monthly family income.
- •Medical emergencies (26%), family expenses (22%), and job loss (18%) are primary reasons for taking on new debt, not always overspending.
- •The cycle intensifies when new borrowing doesn't solve cash flow issues but merely adds more repayments, leading to multiple simultaneous obligations.
- •Missed repayments can result in recovery calls, abusive language, frequent lender calls, and threats of legal action, according to surveyed borrowers.
Key Questions Answered
According to data from the debt-resolution platform Expert Panel, 40 percent of borrowers who approached the platform were using new loans or credit cards to manage their existing EMIs.
Medical emergencies or health issues are the biggest reason at 26 percent, followed by family or personal expenses at 22 percent, business- or job-loss requirements at 18 percent, and household or daily needs at 15 percent.
Among surveyed borrowers, 39 percent reported recovery calls or abusive language, 28 percent experienced frequent calls from multiple lenders, 11 percent faced home or workplace visits, and 8 percent received threats of legal or police action.
