How Gen Z Is Redefining Credit and Debt Culture in India

For years, debt in India was often viewed as something to avoid unless absolutely necessary. Loans were primarily associated with buying a home, funding higher education, or meeting emergency expenses. However, Generation Z is changing this narrative. Growing up in a digital-first world, Gen Z sees credit as a financial tool that offers convenience, flexibility, and opportunities rather than just a liability. 

The rapid growth of digital payments, fintech platforms, instant loan approvals, and Buy Now Pay Later (BNPL) services has made credit more accessible than ever. Whether purchasing a smartphone, booking a vacation, or shopping online, young consumers can now split payments into easy EMIs with just a few clicks. According to TransUnion CIBIL, Gen Z accounted for 41% of all first-time borrowers in India during 2024, making them the largest contributor to the country’s new-to-credit population. This highlights how younger Indians are entering the formal credit ecosystem earlier than previous generations. 

Unlike earlier generations that primarily borrowed to build assets, Gen Z increasingly uses credit to support lifestyle spending, digital consumption, and short-term financial flexibility. At the same time, they are also becoming more aware of the importance of maintaining a healthy credit profile. TransUnion CIBIL reported that 183 million Indians were actively monitoring their CIBIL Score by the end of 2025, with Millennials and Gen Z leading this shift. Nearly 45% of consumers improved their Credit Score within six months of regularly monitoring it, reflecting a growing culture of responsible credit management. 

Social media has further accelerated this transformation. Financial influencers are educating young audiences about credit scores, credit cards, rewards, investments, and responsible borrowing. While this has improved financial awareness, it has also increased the risk of impulsive borrowing driven by lifestyle aspirations and easy access to unsecured credit. As a result, financial literacy has become just as important as financial inclusion. 

Gen Z is undoubtedly redefining India’s credit culture. Credit is no longer viewed merely as debt—it is increasingly seen as a financial enabler. However, as access to credit expands, responsible borrowing, timely repayments, and regular credit monitoring will determine whether this generation builds strong financial health or falls into unnecessary debt. 

Sources 

• TransUnion CIBIL – 41% of First-Time Borrowers Are Gen Z: https://newsroom.transunioncibil.com/41-of-first-time-borrowers-are-gen-z-according-to-transunion-cibils-latest-cmi-report/ 

• TransUnion CIBIL – 183 Million Indians Now Self-Monitor Their CIBIL Score: https://newsroom.transunioncibil.com/credit-monitoring-goes-mainstream-183-million-indians-now-self-monitor-their-cibil-score/ 

• PwC India – The Indian Payments Handbook 2025–2030: https://www.pwc.in/assets/pdfs/indian-payments-handbook-2025-2030.pdf