Average Personal Loan Sizes in India 2026: A Comprehensive Report

Pankaj Singh • 21 February 2026

Discover FY26 trends in India's average personal loan market. Explore how shifting strategies between PSBs and NBFCs are driving up the average loan ticket size.

The Indian personal loan market bounced back strongly in the 2026 financial year (FY26). After a slight drop last year, the total amount of new loans given out has jumped. In the second quarter alone, the total value of approved loans hit ₹2.92 lakh crore, marking a massive 35% increase from the same time last year. Interestingly, this market growth is mainly because people are taking out bigger loans, not just because more people are borrowing. If you are planning to borrow, using a Personal Loan Calculator can help you estimate your monthly payments based on these changing loan trends.

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Here is a quick summary of the report's key findings:

Rising Average Loan Size: The system-wide average personal loan size reached ₹68,600 in Q2 FY26, a quick 17.3% increase from the previous quarter.
A Divided Market: Public Sector Banks are focusing on large-ticket loans (averaging ₹6.61 lakh), while NBFCs and fintechs continue to serve the mass market with smaller loans (averaging ₹28,000).
Volume vs. Value: While non-bank lenders handle an incredible 91% of all loan applications, traditional banks actually disburse the majority of the total loan money.
Stricter Lending: Banks are reducing their risk by cutting back on loans to first-time borrowers, with the share of new-to-credit loans dropping to just 7.0%.

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Overall Market Growth & Average Loan Size

The average personal loan size across India has seen a sharp upward trend. By the second quarter of FY26, the overall average loan reached ₹68,600, reflecting a quick 17.3% increase from just three months prior. While the actual number of loans only grew by 9% compared to last year, the total money handed out grew by 35%, showing a clear shift toward higher-value credit.

Average Loan Size by Lender Type

Different types of lenders are taking very different approaches to who they lend to and how much they give. Government-owned banks (Public Sector Banks) are focusing heavily on big loans. In the first half of the year, the average loan size for Public Sector Banks grew by 22% compared to last year, reaching ₹6.61 lakh. Private banks grew a bit slower, with a 5% increase pushing their average loan to ₹3.89 lakh.

On the other hand, non-bank financial companies (NBFCs) and digital loan apps are sticking to small amounts. Despite growing 16.7% over the past year, the average loan from an NBFC sits at just ₹28,000.

Market Share: Who is Giving Out the Most Money?

Because banks and NBFCs are giving out different loan sizes, the market looks split. Non-bank lenders and fintech apps handle an incredible 91% of all loan applications by volume, but traditional banks hand out the most actual money. In the recent quarter, government banks held 36% of the market value. Private banks held 24.7%, and NBFCs held 37%. This highlights that while NBFCs process the vast majority of applications, the heavy capital is moving through traditional banking channels.

The Shift Toward Larger Loans

The main reason the overall average loan size is going up is that banks prefer giving larger loans. Loans above ₹10 lakh now make up the biggest chunk of total loan value in India, accounting for 37.4% of all money lent in the second quarter. This is a significant jump from 30.2% just three months earlier. Small loans under ₹1 lakh are still the most common for everyday borrowers, but they make up a tiny fraction of the total money moving through the system.

Who is Getting Loans?

Banks and lenders are becoming much more careful about who they lend to. The share of loans given to first-time borrowers dropped to just 7.0% recently, down from 9.6% earlier in the year. Lenders are tightening their rules and prefer giving money to people who already have a solid credit history. This cautious approach is another reason why banks are sticking to larger loans for trusted, established customers.

Loan Repayment & Late Payment Trends

Overall, Indians are doing a slightly better job at repaying their loans on time early on. Early-stage late payments (loans overdue by 31 to 90 days) dropped to 1.6% from 2% last year. However, there is a clear difference depending on the loan size and lender.

Big loans given by banks have very few late payments. Small loans under ₹1 lakh, mostly given by NBFCs, are seeing more people struggle to pay on time. Severe late payments (overdue by 91 to 180 days) for NBFCs sit at 1.8%, while government banks only see 0.4%.

Microfinance and Small Loan Trends

Digital loan apps and NBFCs remain the top choice for small, everyday borrowing. For digital loan apps, the average loan size is very small, around ₹16,085, and over 65% of their borrowers are under the age of 35. In the broader microfinance space, the average small loan size grew by nearly 16% over the last year, reaching ₹60,200. These smaller platforms are highly active, handing out over 1 crore individual loans in the recent quarter alone.

Economic Impact & Future Outlook

The lending market is growing largely because the broader Indian economy is doing well. A growing economy gives consumers the confidence to borrow and spend. The Reserve Bank of India (RBI) lowering interest rates has made it cheaper for banks to access money, stimulating demand for credit. Experts predict this trend will continue into next year, with the average loan size slowly climbing as traditional banks keep focusing on larger, safer loans.

A Look at Gold Loans

As regular personal loans get stricter for new borrowers, many people are turning to gold loans. The total value of new gold loans jumped 53% compared to last year, with the average gold loan size currently at ₹1.64 lakh. If you have gold jewelry and need funds quickly without a strict credit check, you can use a Gold Loan Calculator to see how much you could borrow at current rates.

Authoritative Sources

Economic Times (ETBFSI): Personal Loan Growth Reaches New Heights in FY26: PSBs Capture Market Share and Boost Asset Quality - Source
BW Businessworld: Personal Loan Disbursements Rebound 23% YoY In H1FY26 - Source
LiveMint: Led by PSU banks, large-ticket personal loans grow over 37% in value in Q2: report - Source
CRIF High Mark: How India Lends - Sept 2025 - Source
LiveMint Money: Loans above ₹50,000 contributed highest to fresh small loans in Dec quarter: Study - Source
CRIF High Mark: Fintech Digital Report - Source