How Social Media Is Pushing Young Indians Into Personal Loans

Are you borrowing money just to keep up on Instagram? In 2024, Indians collectively spent 1.1 lakh crore hours on their smartphones, with nearly 70% of that time devoted to social media, gaming, and videos.

Social media isn’t just about updates anymore. It’s shaping habits. And now, it’s pulling thousands into unnecessary personal loans. This blog breaks down how it's happening, why it’s risky, and how you can break the cycle. It’s not just a financial topic—it’s a lifestyle crisis. Let’s break this trap wide open.

The Cost of Living Online: Why Young Indians Are Falling Into Loan Traps?

In the last year alone, Indians spent over ₹1,10,000 crore hours on smartphones. A major chunk of that went to Instagram, YouTube Shorts, and shopping apps. Brands know this. They target you, they retarget you, and they don’t stop until your thumb clicks “Buy Now.”

This isn’t just about ads. It’s about pressure. Everyone around seems richer. So, you start feeling left behind. Your friend just posted a reel in Goa. The other just bought a ₹1,30,000 iPhone. You start thinking—why not me? Then comes the ad from a digital lender: “Loan approved in 10 mins.”

You take the loan. Now it begins.

Let’s say you're 24. Your salary is ₹35,000. You buy a new phone on EMI—₹6,000 a month. Then a trip to Manali, another EMI—₹4,500. Add some shopping—₹3,000 EMI.

Suddenly, half your salary is gone. Now, one late payment and your CIBIL score crashes. This is where most don’t realise the risk.

Quick Loans, Quicker Trouble: The Tech That Makes You Borrow

Earlier, borrowing money meant visiting a bank. Now, apps do it in minutes. It’s simple—fill your PAN, share Aadhaar, selfie, and boom—you get ₹50,000 in your account. But what you don’t see are the interest rates—up to 35% or even 42% per year.

Here’s where things get darker.

Most of these apps are promoted through influencers. They show dream lifestyles, with captions like “How I travelled Europe with just ₹10,000!” You swipe up, install an app, and borrow ₹70,000. For what? Three nights in Prague and Instagram posts. And now you're repaying ₹1,10,000.

And remember, digital lenders don’t wait. Miss 1 EMI? They spam your contacts. Your manager may get a WhatsApp from them. That’s not just financial stress—it’s social shame.

Personal Loan EMI Impact on Young Salaries

Peer Pressure Is the New Poverty Trap

Social comparison is not new. But social media makes it daily, in-your-face, 24x7. One “Outfit of the Day” post makes you feel your ₹899 jeans are not enough. So you swipe, you tap, and now you owe ₹7,000 on your BNPL (Buy Now Pay Later) app.

You aren't spending for need. You are spending to not feel left out.

Let’s take another example. A 25-year-old software engineer from Pune wanted to attend a Coldplay concert in Mumbai. The cheapest ticket was ₹5,000. She didn’t have that. So she borrowed ₹10,000 to buy a VIP pass. Why? “Because everyone from my team was going and I didn’t want to look broke.”

This thinking isn’t rare anymore. Even if savings are zero, FOMO wins. The trap tightens.

And don’t forget—credit card offers follow you. After 3-4 online purchases, banks push pre-approved cards. You feel rich. But the ₹40,000 limit is not your money.

What Young Indians Are Borrowing Money For?

What’s Really Happening Behind These Loans?

Most personal loans taken by people under 30 are unsecured. That means no assets, no backup. You delay, they penalise. You default, your future borrowing dies. One missed EMI can drop your credit score by 100 points.

Even more dangerous—young borrowers often take top-up loans to repay old ones. That’s a classic debt spiral. It never ends well.

Snowball Borrowing Trap technique: Many use this by rolling one loan into another. EMI from loan A is paid using loan B. It keeps the record clean but inflates debt silently.

Now imagine you're 29, married, and want to buy a house. Your home loan is rejected. Why? Because that ₹1,00,000 loan from 4 years ago is still hurting your credit score.

Debt Burden Over Time

How to Break the Cycle: Build Financial Discipline Early?

The truth is—money borrowed for social approval has no return. No ROI. The lifestyle borrowed is never real.

Instead, use the 50-30-20 Rule:

• 50% for needs (rent, bills, groceries)
• 30% for wants (fun, travel)
• 20% for savings or investments

Avoid quick loans unless for emergencies. Instead, try sinking funds. Save monthly for big buys. Also, use credit score apps to check your standing. Most of them are free.

Use budget tracking tools like Walnut, Money View, or even Excel. Know your EMI-to-income ratio. If it's more than 35%, stop borrowing.

And unfollow accounts that make you feel poor. Curate your feed like your wallet.

Credit Score vs Loan Repayment Behaviour

Conclusion 

Personal loans are easy to get but hard to manage if taken for the wrong reasons. Social media makes us want more than we need. Don’t borrow just to look rich online. 

Focus on saving, spending wisely, and building a strong money habit. The flashy lifestyle you see is often fake. Stay real, stay simple, and protect your future. Think before you click “apply now” on any loan app.

FAQs

1. Why are personal loans growing fast among Indian youth?
Because of easy digital access, social media pressure, and low financial literacy, many young Indians now take loans without understanding the risks.

2. How can I stop borrowing money for non-essentials?
Track your spending. Set savings goals. Avoid lifestyle inflation. Start with the 50-30-20 rule and automate your savings.

3. Is Buy Now Pay Later better than personal loans?
Not always. BNPL often comes with hidden charges. Missed payments affect credit scores just like loans. Use it only if you can repay within 15–30 days.

4. What happens if I miss one EMI?
Your credit score drops. Interest increases. Recovery agents may call. If you miss 2-3 EMIs, lenders may report it to credit bureaus.

5. Can social media be used to build better money habits?
Yes. Follow finance creators, use money-saving challenge reels, and engage with budgeting content. You control your feed.

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LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?