Personal-Loan NBFCs Set for 50% AUM Growth in FY27 as Repayments Improve

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The forecast puts lenders on a faster growth path, although their approach to applicants has become more selective. Crisil’s forecast follows a shift away from riskier loans, with expansion focused on borrowers lenders consider more likely to repay. An applicant still has to pass those checks. The agency also flags a risk beyond lenders’ control: a sharper-than-expected rise in inflation or interest rates could squeeze household cash flows and weaken repayment performance.

How Will This Affect Personal-Loan Borrowers?

The change is visible in who accounts for the loan book. Of the AUM held at FY26-end, 4% came from new-to-credit customers. Their share had been around 10% 2 years earlier. During that time, lenders turned more towards stronger credit profiles and reduced short-tenor, high-cost lending. The comparison tracks the loans in their portfolios. It cannot show an applicant’s chances of approval because it contains neither application totals nor the number of offers made.

The reading is that faster growth and wider access to credit are different outcomes. A falling share of first-time borrowers does not establish that their loan balances fell: the overall portfolio may have grown faster. For applicants using our personal-loan comparison service, approval still rests with the lender. The sector’s growth forecast cannot determine an individual application’s outcome.

Why Are Repayments Improving?

Credit bureau checks remain part of the process, but Crisil describes lenders also using transaction records and information obtained through account aggregators. These inputs help them assess applicants alongside their borrowing history. More selective lending has followed, with tighter credit filters shaping which loans enter the portfolio. Crisil connects that shift in borrower selection with the improvement in repayment performance. The change starts before a loan is sanctioned.

Exposure to short-tenor loans carrying high annualised percentage rates has also declined. This helps explain why a lender can expand while reporting better portfolio performance: the loans being added differ from those issued earlier.

What Do Crisil’s Analysts Say?

Malvika Bhotika, Director at Crisil Ratings, said asset quality improved in FY26. Her assessment also examined what happened after newer loans were issued. Across most Crisil-rated lenders, H1 FY26 originations had around 40% lower 90+ days past due levels at 6 months after origination than FY25 cohorts. The timing is relevant here. Rather than comparing an older loan book with recently issued credit, this analysis examines repayment stress at the same point in the loans’ lives. It provides evidence of better performance among newer loans, within the lenders studied.

Digital lending gives these businesses the ability to handle a larger portfolio, Divackar Chandrasekhar, Associate Director at Crisil Ratings, said, linking the outlook to sustained consumer demand and improving loan performance. His explanation places the growth forecast alongside the changes already made in lending. Crisil’s caution concerns what happens as expansion gathers pace: competition and higher growth targets could put pressure on credit standards. Retaining the checks that helped improve portfolio quality is therefore central to the agency’s assessment of the sector.

What Changed Before The FY27 Forecast?

The expansion follows approximately 32% AUM growth in FY26. The figures below separate that earlier performance from the FY27 projection.

The adjusted delinquency ratio includes trailing 12-month write-offs. It should not be described as the ordinary gross non-performing asset ratio. Likewise, AUM measures the portfolio under management, rather than annual disbursements or profits. The comparisons appear in the October 2026 reporting on Crisil’s assessment.

Conclusion

Crisil’s FY27 forecast rests on lenders expanding after improving borrower selection. For applicants, the practical distinction is between a growing lending market and a loan they can obtain and repay. The former does not establish the latter.

Frequently Asked Questions

1. What Does 50% AUM Growth Mean?

It means Crisil expects the combined portfolio under management to grow by approximately 50% in FY27. It does not mean every lender will grow at that rate.

2. When Does FY27 End?

India’s FY27 runs from 1 April 2026 to 31 March 2027. Crisil’s October assessment is therefore a forecast made during the financial year.

3. Does Better Asset Quality Mean Personal-Loan Rates Will Fall?

Better asset quality describes repayment performance. It does not, by itself, establish a reduction in the interest rate offered to a borrower.

4. How Do I Get A Personal Loan Online In India?

An application can be submitted through a lender or a comparison platform. Identity and income documents support the assessment; the bank or NBFC makes the sanction decision.

5. Who Is The Actual Bank Or NBFC Giving The Loan?

The lender named in the loan agreement provides the credit. A platform handling the application may be a separate business. That distinction also appears in borrower discussions about digital personal loans.