As 2025 draws to a close, the lending landscape
in India has achieved a new benchmark of speed and standardisation. Credit
decisions that once took days or weeks now conclude in minutes, even for large
loans such as LAP (Loan Against Property). This pace now mirrors consumer
buying behaviour and the economic cycle.
The How India Borrows 7.0 study by Home
Credit India highlights this shift, with 49% of borrowers using loans to
upgrade daily needs such as smartphones and home appliances. As credit becomes
deeply embedded in everyday spending, the conversation heading into 2026 is no
longer about speed alone but about how well lenders understand and respond to
changing customer expectations. The new frontier is personalisation.
- Speed Has Become the New
Standard
Lending in 2025 has reached a point where speed
is expected, not celebrated. Processes that once required a day or a week are
now completed within minutes. This has allowed credit to move in step with
consumer intent and spending behaviour. As borrowing increasingly supports
lifestyle upgrades, lenders that can integrate credit into everyday purchases
and deliver near real-time decisions are setting the benchmark.
2.
Automation
Is No Longer Enough
In the past, lending decisions were driven
largely by traditional credit profiles and fixed scorecards. In 2026,
automation alone will not suffice. Leading lenders are moving toward a
sophisticated mix of internal and external data—integrating GST filings,
employment patterns, geospatial information, and social signals. The goal is to
move beyond "Yes/No" decisions toward offering relevant, flexible
financial solutions.
3.
Personalisation
Is Entering Its Next Phase
Earlier lending and risk models were static and
rule-based. Over time, banks and NBFCs have moved through stages of
personalised lending, card-linked journeys, and co-branded products. The next
phase will see lending integrate seamlessly with everyday spending, with
omnichannel experiences becoming the default. Lenders are now using multiple
data sources such as employment data, social platforms, and other alternate
signals to build a deeper understanding of borrowers. This approach allows
lenders to align products with individual needs, whether it is a personal
top-up loan alongside a LAP, an accessory loan covering more than just consumer
durable, or a personal loan paired with a credit insurance.
4.
Products
Are Being Built Around Life Stages
Indian lenders have responded to technological
shifts, digital disruption, and economic headwinds by designing products around
life stages rather than generic borrower profiles. Examples include flexible
moratoriums for students aligned with academic cycles, dynamic credit limits
for first-time salaried borrowers that evolve with income visibility, and
cash-flow-based assessments for self-employed customers instead of rigid
documentation. These changes have delivered encouraging outcomes and reflect a
more practical approach to lending.
5.
Omnichannel
Lending Has Become a Basic Expectation
Borrower behaviour shows a clear move towards
omnichannel and online-first lending. The How India Borrows 7.0 report reveals
that 65% of borrowers prefer EMI cards, even as 57% shop online. Preference for
online borrowing channels has risen from 32% to 51 % in one year, while
reliance on physical branches and point-of-sale locations has dropped from 49%
to 30%. This confirms that omnichannel lending is no longer an innovation but a
baseline requirement. Building this experience requires lenders to retrain
credit processes, upskill channel partners, and reorient relationship managers
into advisory roles as lending aligns more closely with personal life goals.
6.
Borrower
Confidence Remains Steady
Despite ongoing macroeconomic uncertainty,
borrower confidence remains intact. According to the How India Borrows 7.0
report, 46% of borrowers continue to assess EMI affordability before taking a
loan. At the same time, 28% of borrowers feel confident about using credit to
purchase a home. This reflects a measured yet optimistic approach towards
borrowing.
7.
AI
Will Shape Lending in 2026
The biggest disruption in 2026 will come from
operationalising AI at scale. AI can expand financial access in areas where
traditional advisory models are difficult to deploy and enable consumers to
explore financial options independently. Operationally, AI can assist in managing
eligibility checks, stress prediction, and early warning signals. However,
moments that require reassurance and trust will still depend on human
interaction.
In short, the real opportunity in 2026 lies in
balancing AI-driven efficiency with human understanding. While automation will
continue to scale operations, lending will remain a deeply personal decision.
Lenders that embed empathy, context, and guidance into their systems will stand
out. Finance in 2026 will favour institutions that listen closely, design
thoughtfully, and deliver efficiency that feels genuinely human.