11% Indians Borrow Personal Loans For Medical Emergencies, Tier 1 Highest At 14%

Urban Indians are increasingly using personal loans to manage sudden medical shocks. India Today news reports show 11% of borrowers take personal loans for emergency healthcare/medical expenses, rising to 14% in Tier 1 cities. 

The pressure comes from a mix of fast-rising treatment costs and limited financial protection. India Today notes medical inflation is estimated at 12–15% annually.

It also points out that out-of-pocket expenditure still accounts for around 39.4% of total healthcare spending (2021–22), meaning many families still pay a large share directly when a big bill hits. 

Why Are Urban Indians Using Personal Loans for Medical Shocks?

Indian coverage suggests medical bills are now a mainstream trigger for unsecured borrowing, with a clear metro-to-small-town gradient. 

Reports also show borrowing is split across essentials, aspirations, and business needs. 

Channel behaviour adds another layer: Business Standard reports that only 32% of borrowers took personal loans online, showing offline distribution still dominates for many. 

This trend also suggests that personal loans are increasingly being used as a ‘bridge’ when savings, insurance cover, or claim timelines do not match the speed and size of hospital bills, especially in Tier 1 cities where treatment costs are typically higher. 

However, this convenience can come at a cost: medical emergencies often push borrowers towards quicker, unsecured credit at relatively higher rates and tighter repayment schedules. This can strain household cash flows well beyond the hospitalisation period. 

What Has Changed Over The Past Few Years?

Indian news coverage suggests household burden is easing slowly in aggregate, but remains high enough that a sudden hospitalisation can push families into short-term borrowing. 

Business Standard reported that out-of-pocket expenditure fell to 39.4% of total health expenditure in 2021–22, down from 48.8% in 2017–18, alongside a rising government share in health spending.

At the same time, broader cost trends remain elevated: The Economic Times reported that employee medical plan costs in India are projected to rise 11.5% in 2026 (after 13% projected for 2025). 

On the consumer side, lending marketplaces are positioning personal loans as quick medical funding. LoansJagat’s medical emergency personal loan page states approval odds improve with a CIBIL score above 650 and lists medical bills as a common emergency use case. 

What Stakeholders Are Saying?

Indian reporting has increasingly focused on billing practices and claim-processing reforms. A Times of India report highlighted government scrutiny of alleged hospital “overcharging” and a planned shift toward stricter supervision via claims-portal oversight reforms.

On claims volume, The Indian Express reported that in FY25, general and health insurers settled 3.26 crore health insurance claims and paid ₹94,247 crore toward settlements (per IRDAI). 

Conclusion

Indian news reports consistently show medical emergencies are now a major personal-loan trigger—11% overall, and 14% in Tier 1 cities.

With medical inflation cited at 12–15% annually and around 39.4% of healthcare spending still coming directly from households, personal loans are increasingly filling the gap when savings and coverage fall short.