Gen Z India’s Debt: iPhone EMIs & Gold Loans Surge

A tragic incident in Maharashtra involving an unpaid iPhone EMI has brought a critical issue into focus: India’s Gen Z is increasingly burdened by consumption-driven debt. This trend shows young borrowers taking on financial commitments that often exceed their current income.

We all know the pull of a new gadget, and for many, an iPhone isn’t just a phone—it’s a status symbol. This desire is fueling a significant rise in young people using EMIs to get these devices, often stretching their budgets.

Understanding the EMI Trend

Here are some key numbers showing how much these purchases rely on financing:

42% of all smartphones in India are bought on EMI.

Nearly two-thirds of premium smartphones, where iPhones dominate, are purchased this way.

Apple products have the longest average EMI repayment period at 17.2 months, compared to 10 months for other smartphones.

An iPhone costing Rs 75,000 can be bought on EMI, even when the average Indian salaried employee earns about Rs 20,700 a month.

Apple shipped 14 million iPhones in India in 2025, showing this financing model’s impact.

The Wider Debt Picture

It’s not just phones; this trend is part of a larger picture of rising household debt that the Reserve Bank of India (RBI) is closely watching. Your spending habits contribute to these bigger economic shifts.

Consider these shifts in household debt:

Household debt grew from 41.3% of GDP in March 2025 to 45.5% by September 2025.

Non-housing retail loans, like personal loans and credit cards, now make up 58.4% of total household debt, up from 50% in 2019-20.

Gold loans saw the fastest growth, increasing by 55% in seven months to Rs 4.89 lakh crore by April 2026, as people use assets to cover daily expenses.

Gen Z’s Role in Credit

You, as part of Gen Z, are rapidly shaping the credit landscape. Many young people are starting their credit journey with these types of consumption-driven loans.

Here’s how Gen Z is entering the credit system:

Gen Z accounted for 41% of all new-to-credit borrowers in 2025-26.

Four out of ten young borrowers begin with credit cards, personal loans, or consumer durable loans, often specifically for phones.

Fintech lenders, who give out many small personal loans, have 70.5% of their loan books unsecured, with half going to borrowers under 35.

Delinquencies on these small-ticket loans are high at 6.4%, much higher than the overall unsecured retail loan NPA ratio of 1.7%.

India’s credit card base expanded to 5.2 crore holders by March 2026, with outstanding balances growing 8.3 times since 2016.

The average individual debt across these cards has reached Rs 4.78 lakh.

While banks might look healthy, the RBI’s warnings suggest that households are feeling the strain. This is a reminder to think carefully about how much debt you take on, especially for purchases that might quickly lose value.