Let’s Take A Ride! Personal Vehicle Loans Nearly Triple to ₹12.76 Lakh Crore Since 2019, Outpacing Industrial Credit Growth

Total outstanding balances for personal vehicle loans in India nearly tripled between 2019 and 2026, leaping from ₹4.78 lakh crore to ₹12.76 lakh crore as demand for feature-packed cars and two-wheelers surged across the country. Putting in perspective, credit to large industry between March 2019 and March 2026 has increased by just 28% to Rs30.82 lakh crore, RBI monthly bulletin data shows.

A comprehensive credit market report released by TransUnion CIBIL reveals that passenger vehicle loan balances expanded 2.6 times from ₹4.23 lakh crore in June 2019 to ₹11 lakh crore in June 2026. During the same seven-year period, two-wheeler loan balances skyrocketed 3.2 times, growing from ₹55,000 crore to ₹1.76 lakh crore. This rapid credit expansion highlights an evolving retail lending market fueled by rising vehicle prices, longer loan tenures, and expanding credit footprint in non-metro areas.

Passenger Vehicle Credit Touches ₹11 Lakh Crore

The surge in car loans to ₹11 lakh crore comes as buyers increasingly opt for higher-value vehicles, particularly SUVs. To keep monthly repayments manageable, lenders have pushed average car loan tenures by five months to 62 months. The average car loan amount reached ₹8.2 lakh in H1 2026, marking a 49 per cent jump from H1 2019.

The total active borrower base for passenger vehicles expanded 1.7 times over the period, reaching 2.5 crore consumers compared to 1.47 crore in 2019. Despite the steep volume expansion, portfolio performance improved, with 90+ days past due delinquency rates falling 95 basis points to 0.5 per cent.

Non-Banking Financial Companies (NBFCs) lead the car loan market with a 37 per cent share of live balances, followed by private sector banks at 26 per cent.

"Car ownership is increasingly being shaped by a combination of aspiration and affordability," said Bhavesh Jain, Managing Director and CEO of TransUnion CIBIL. "Consumers are choosing higher-value and feature-rich vehicles, while larger loan amounts and longer tenures are helping make these purchases more manageable."

Two-Wheeler Loans Jump 3.2 Times to ₹1.76 Lakh Crore

The two-wheeler financing market recorded even faster growth, ballooning 3.2 times from ₹55,000 crore in 2019 to ₹1.76 lakh crore by June 2026. Active two-wheeler borrowers nearly doubled from 1.7 crore to 3.3 crore over the same timeline.

Delinquencies in two-wheeler loans saw significant improvement, dropping by 128 basis points to 1.4 per cent—the lowest level recorded since 2019. NBFCs continue to dominate this segment, underwriting 73 per cent of all active two-wheeler loans.

The profile of two-wheeler borrowers has also matured. Experienced borrowers holding established credit histories over two years made up 43 per cent of new originations in 2026, up from 27 per cent in 2019. First-time credit borrowers accounted for 39 per cent of new originations, down 19 percentage points from pre-pandemic levels.

Non-Metro Geographies Drive Market Growth

Semi-urban and rural (SuRu) regions accounted for 61 per cent of all vehicle loan originations in H1 2026, up from 56 per cent in H1 2019. For two-wheeler loans specifically, SuRu geographies anchored 64 per cent of overall originations.

Rural households upgrading directly from a two-wheeler to a car expanded at a 15 per cent compound annual growth rate (CAGR) since 2019—nearly double the 8 per cent CAGR seen for total car loan originations. Additionally, 51 per cent of higher-value car loan upgrades originated in semi-urban and rural markets during the first half of 2026.

"Two-wheelers are closely linked with how young India studies, works and earns," Jain noted. "The borrower behind a two-wheeler loan is changing. More consumers are coming in with an established credit history, and two-wheeler finance is increasingly becoming part of a longer customer journey."