Why Are Under-30 Professionals Taking Loans? Expanding Business & Upskilling Among Top Goals, Study Finds
Lifestyle expenses and financial security in healthcare also make up the top reasons to avail loans for young professionals.
Upskilling, expanding business, new life experiences — it seems India's young professionals know what they want, and won't mind leaning on loans for the same. A new report by mPokket highlights a growing trend among young borrowers in India, with a significant portion using credit to invest in skill development and entrepreneurial ventures.
What Are The Biggest Reasons For Taking Loans?
The study reveals that 57 per cent of borrowers under 30 are opting for loans to finance short-term courses, digital certifications, and technical training, indicating a strong focus on career enhancement and self-improvement.
The findings also emphasise a shift towards entrepreneurship, with 25 per cent of young professionals securing loans to support their business ideas. Among them, 59 per cent utilised credit for business expansion, while 27 per cent allocated funds towards marketing efforts. This trend underscores the increasing inclination of young professionals toward financial independence and business ownership rather than conventional employment.
Another notable trend is the use of loans for lifestyle expenses. About 20 per cent of young borrowers have taken credit for discretionary spending, with shopping (45 per cent) and travel (31 per cent) emerging as the primary expenses.
Additionally, financial security in healthcare is gaining prominence, with 24 per cent of young borrowers availing loans for medical emergencies in 2024. A significant 88 per cent of these medical loans were used for medicines and treatment.
Digital Lending Platforms Come To Aid
Digital lending platforms have become integral to this evolving borrowing behaviour, the study claims. The report suggests that young individuals are not only using these platforms for education and business needs but also for essential life expenses.
The data indicates a steady reliance on credit for various purposes, shaping financial habits for the coming years.
What's In The Cards For Future?
Looking ahead to 2025, the report anticipates an increased preference for short-term loans aimed at high-impact learning investments. There is also a growing reliance on accessible credit for business funding and independent careers. Additionally, young borrowers are expected to shift towards planned spending on travel, wellness, and personal development.
Higher adoption of digital lending solutions for medical and emergency expenses is also projected.
The study further predicts that young borrowers will display enhanced financial literacy in the coming year, with a rising demand for flexible repayment options. Additionally, as more professionals embrace freelancing and independent work, the need for working capital is expected to grow, reinforcing the role of credit in supporting new-age career paths.
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