In 2025, credit lines are fast becoming one of the most sought-after financial products. Changing consumer behaviour, rapid tech adoption, and a cautious credit environment are driving this shift. What makes them attractive is their flexibility, ease of access, and seamless link with digital payment systems. Data from India and global markets confirms their rise, signalling a clear need for lenders like Easiloan to keep innovating.
Economic and Credit Environment in 2025
The Reserve Bank of India (RBI) data for mid-2025 highlights a cautious but steady credit expansion with non-food bank credit growing at 10.2% year-on-year as of June 2025, down from 13.8% a year earlier. The moderation in overall credit growth reflects more selective lending practices focused on risk mitigation, especially amid regulatory pressures on unsecured lending categories like credit cards, personal loans, and non-banking financial companies (NBFCs).
Personal loans, a significant component of consumer credit, have decelerated to a 14.7% growth rate in June 2025 from 16.6% the previous year, driven by slower growth in vehicle loans and credit card dues. Similarly, credit card outstanding growth slowed to 8.5% in May 2025, indicating a cautious consumer credit demand environment. Nevertheless, rural and semi-urban markets show resilience, accounting for 52% of credit inquiries, reflecting widening financial inclusion. Deposit growth has outpaced credit expansion, stabilising liquidity in the banking system.
The Flexibility and Utility of Credit Lines
Credit lines bring a kind of freedom that traditional loans rarely offer. Instead of a fixed lump sum, they give borrowers a revolving pool of funds—draw, repay, and reuse as needed. For anyone dealing with unpredictable cash flows or sudden expenses, this flexibility makes a real difference. It also removes the hassle of reapplying each time, making financial management far smoother.
What’s changing fast is how credit lines are being delivered. Many are now linked with UPI and Buy Now Pay Later services, opening up access in ways that didn’t exist a few years ago. For younger, digital-first consumers, this is more than convenience. It’s a smarter, more transparent way to borrow, with the option to defer payments without immediate interest weighing them down.
Expanding Market Demand and Demographic Shifts.
The credit card market serves as a proxy for credit line adoption, reaching approximately 108 million active cards by the end of 2024, doubling in five years, with transaction volumes rising about 31% year-over-year. The projected total value of card payments is expected to exceed INR 30.1 trillion in 2025, growing at nearly 9.4%.
This growth appears reinforced by younger demographics, particularly millennials and Gen Z, who value credit lines integrated with flexible repayment options and digital ecosystems. The surge in credit usage in rural and semi-urban regions further expands the market, driven by increasing financial literacy, smartphone penetration, and government-backed financial inclusion initiatives, such as the RBI’s Financial Inclusion Index, which rose to 67 in 2025, showing a 24.3% improvement from previous years.
Risk Management and Regulatory Oversight
While credit lines are advantageous, regulatory authorities, including the RBI, maintain vigilance over potential risks. The gross non-performing asset (NPA) ratio in Indian banks remains near multi-decade lows, but delinquency rates in retail segments, particularly unsecured personal loans and credit cards, require continual monitoring.
RBI’s interventions, such as higher risk weights on unsecured loans, tighter norms for NBFCs, and enhanced credit information sharing, aim to sustain credit growth while managing asset quality. Importantly, India's household debt-to-GDP ratio is moderate at 41.9%, below emerging market averages, with consumption loans constituting 54% of household debt, underscoring the importance of managing consumer credit prudently.
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Bottomline
Credit lines highlight a clear shift in how borrowing is being approached. They are shaping new habits around liquidity, repayment, and financial independence, with rural markets showing resilience, younger borrowers driving adoption, and rising financial literacy broadening participation.
For lenders, the task ahead is to design products that inspire trust. Clarity, fairness, and innovation must guide the way. Those who succeed will not only capture growth but also strengthen the foundations of India’s credit system for the long term.
About the Author
Pramod Kathuria is the Founder and CEO of Easiloan, a pioneering digital home-loan marketplace he established in 2021. With an MBA in Marketing from Pune University and over two decades of leadership experience spanning ICICI Bank, Lodha Group, L&T Realty, and GMR Group, he brings deep domain expertise in banking, real estate, and home financing. At Easiloan, he guides the company’s strategic roadmap, expansion, and fundraising, leveraging technology to create a customer-centric, AI-driven solution for seamless home-loan sourcing and approval.
