2025, Vol. 8, Issue 1

author(s)
Sanjay Pattanshetty and Srinivasa Murthy BV

abstract
The rising dependency on Equated Monthly Instalments (EMIs) among Indian middle-class families has reshaped household financial planning. With increasing aspirations for homeownership, education, vehicles, and consumer durables, a significant portion of household income is allocated towards debt repayment. The proliferation of digital lending platforms, Buy Now Pay Later (BNPL) schemes, and unsecured credit has further fuelled EMI-based consumption. However, this trend has also led to declining household savings, higher debt-to-income ratios, and financial vulnerability. This study examines the challenges faced by middle-class families in managing multiple loans, including home loans, vehicle loans, education loans, credit card debt, and personal loans. It also explores the impact of fluctuating interest rates, inflation, and regulatory policies on financial stability. The research aims to assess the coping strategies employed by families, such as loan restructuring, refinancing, prepayment, and discretionary spending adjustments, while also recommending policy interventions to promote responsible credit usage, financial literacy, and long-term financial security.