PANAJI
F or many young Indians, borrowing money has become as easy as ordering food online. A few taps on a mobile app can bring instant cash into a bank account within minutes. “No paperwork”, “zero hassle” and “quick approval” have become the selling points of a new borrowing culture that is quietly trapping many youngsters in cycles of debt.
ROHAN’S STORY
Take the example of Rohan, a 24-year-old working in a private company in Pune. He had recently moved out of his hometown and wanted to build what he called a “good lifestyle”. He bought a new smartphone on EMI, used a credit card for weekend outings and relied on a short-term loan app to book a holiday trip with friends. At first, the monthly payments looked manageable. None of them seemed too large individually.
But problems began when unexpected expenses appeared. His bike needed repairs, his rent increased and a family emergency forced him to send money home. Soon, Rohan was juggling multiple repayment dates. To clear one due amount, he borrowed from another app. Penalty charges and interest started piling up. Within a year, a few “small” loans had turned into a major financial burden that affected his sleep, work and mental peace.
Stories like this are becoming increasingly common among young Indians.
SOCIAL PRESSURE
Short-term borrowing itself is not always bad. In emergencies, loans can help people manage difficult situations. The problem begins when borrowing is used for lifestyle spending, impulse purchases or social pressure.
Many youngsters today feel the need to constantly keep up appearances online. Expensive phones, holidays, gadgets, dining out and fashion are often seen as symbols of success. Social media adds to this pressure by creating unrealistic expectations about how young people should live.
At the same time, digital lending platforms and credit card companies aggressively market easy loans to first-time earners and college students. Advertisements often focus on convenience and instant gratification rather than the long-term cost of borrowing.
EMI BURDEN
The biggest danger of short-term borrowing is that it creates a false sense of affordability. A person earning Rs 30,000 a month may feel comfortable taking multiple EMIs because each payment appears small. But when several repayments combine with rent, fuel, food and daily expenses, the pressure quickly becomes overwhelming.
Another concern is the high interest rates and penalties attached to some short-term loans. Missing even one payment can damage a person’s credit score and lead to repeated calls from recovery agents. Some borrowers also fall into the trap of taking fresh loans just to clear older dues, creating a dangerous debt cycle.
BETTER HABITS
For young people just beginning their careers, financial discipline is far more valuable than temporary luxury. The early working years are the best time to build savings habits rather than debt habits. Even small monthly savings can create financial security over time.
Borrowing should ideally be reserved for essential needs or long-term assets such as education, a home or business investment, not for impulse spending.
One useful habit is to ask a simple question before making any purchase on EMI: “Would I still buy this if I had to pay the full amount today?” If the answer is no, it may not be worth borrowing for.
NEEDS AND WANTS
Youngsters should also understand the difference between needs and wants. A functioning phone may meet all practical needs even if it is not the latest model. A modest holiday can still create good memories without leaving behind financial stress.
Living within one’s means may not look glamorous on social media, but it provides peace of mind in real life.
HIDDEN STRESS
Peer pressure is another factor that deserves attention. Many young people borrow simply because “everyone else is doing it”. But financial decisions should never be driven by comparison.
There is also a growing emotional cost attached to debt. Constant repayment pressure can affect mental health, relationships and confidence. Financial stress at a young age can delay important goals such as higher education, marriage, entrepreneurship or buying a home.
FINAL LESSON
India’s rising youth population can become a major economic strength only if financial habits remain healthy. Easy access to credit should not become easy access to financial trouble.
The temptation of instant spending is understandable in a fast-moving digital world. But young Indians must remember that financial freedom is not about owning expensive things quickly. Real financial freedom comes from having control over one’s money, avoiding unnecessary debt and building a secure future step by step.
(The writer has a keen interest in business and the dynamics of stock markets)
