India’s middle class enjoys luxury homes, cars, and foreign trips. But many families face a hidden issue: the EMI Prison. Financial experts point to this growing problem.
A Pune couple earns ₹3.5 lakh monthly. Their expenses include a ₹1.5 lakh home loan EMI. They also have a ₹50,000 car loan. Lifestyle costs run ₹70,000. Foreign trips add ₹3–4 lakh yearly. These lives seem desirable.
Yet, the reality is stark. The bank controls their next 15 years. This situation isn’t unique. Around 33–45% of salaried Indians pay EMIs. Many exceed the 40% recommended income limit. The pattern is “earn, borrow, repay, repeat.” Families have assets but lack cash.
Household savings are at a 47-year low. They represent just 5.3% of GDP. This makes families weak against emergencies. Defaults are rising. About 5% of personal loans are over 90 days late. Repayment stress is increasing.
Lifestyle debt is common. Nearly 70% of iPhones are bought with EMIs. Many appliances also use this payment plan. Social pressure fuels this. Homes, cars, and gadgets are often financed. They are seen as status symbols.
Financial advisors warn against too much debt. It can lead to financial hardship. They stress limiting EMIs to 40% of income. This is key to escaping the illusion of wealth. It helps avoid long-term struggles.