Multiple vehicle loans, bigger tickets raise risk

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Key points

• (Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.).
• Commercial vehicle loans post 20.1% five-year CAGR as applied cars and auto premiumisation drive lending Live Events.
• While the average amount borrowed per customer is additionally rising, potentially increasing credit risks for lenders, kolkata: More vehicle buyers are taking multiple loans.
• The Economic Times daily newspaper is available online now.
• While the average amount borrowed is additionally rising, raising potential credit risks for lenders, vehicle buyers are increasingly taking multiple loans.

Nifty24, 219.05-32.96. Motilal Oswal Midcap Fund Direct-Growth. The Economic Times daily newspaper is available online now. Rising multiple vehicle loans, bigger ticket sizes raise risk for lenders. Rising multiple vehicle loans, bigger ticket sizes raise risk for lenders. ET BureauLast Updated: Aug 25, 2026, 12: 42: 00 AM IST.

While the average amount borrowed is additionally rising, raising potential credit risks for lenders, vehicle buyers are increasingly taking multiple loans. The trend is most visible in commercial vehicle finance, where borrowers with two or more loans rose to 19.9% in June from 15.7% a year earlier. Listen to this article in summarized format. Unlock AI Briefing and Premium Content. New Year Offer 24 Hours Left. Subscribe Now Already a member? Sign In.

While the average amount borrowed per customer is additionally rising, potentially increasing credit risks for lenders, kolkata: More vehicle buyers are taking multiple loans. The rise in concentration risk is most pronounced in commercial vehicle finance. It has grown at a 20% compound annual rate to ₹7.4 lakh crore as of June end, data from Crif High Mark indicated. The share of commercial vehicle loan borrowers altogether having two or more loans rose to 19.9% from 15.7% a year earlier. Meanwhile, the average vehicle loan exposure per borrower for buying passenger taxis to heavy trucks rose to ₹7.8 lakh from ₹6.4 lakh.

"Exposure to multiple loans calls for intense monitoring by the lenders at the micro level as there can be spillover effects in case of defaults, " Bank of Baroda chief economist Madan Sabnavis remarked. Commercial vehicle loans post 20.1% five-year CAGR as applied cars and auto premiumisation drive lending Live Events.

"As they are small operators, care needs to be taken when disbursing loans which includes going through the credit history of the borrower as well as monitoring the same, " he remarked. Almost half of the vehicle finance borrowers hold credit exposures of ₹60 lakh or more, reflecting robust and established credit relationships driven by high-ticket loans such as housing finance alongside vehicle finance. They additionally have unsecured loans, the Crif report demonstrated. The commercial vehicle loan segment carries the highest early bucket stress, according to the credit information firm. "Within the borrower base, a growing micro segment of multi-loan borrowers is emerging, underscoring the need for deeper bureau checks to assess concentration risks, " it observed in a report. Auto loans, applied to purchase personal cars, saw the share of borrowers with two or more loan accounts rising to 6.8% at the end of the first quarter of FY27 from 5.6% seen a year back. Likewise, the ratio rose to 6.7% from 4.8% for applied car loans and to 4.6% against 3.2% for two-wheeler loans. The auto loan segment saw the sharpest rise in borrower level exposure with average loan rising to ₹5.9 lakh from ₹3.8 lakh as a reflection of rising premiumisation. "This is an interesting trend as individuals are taking more leverage, " Sabnavis remarked. "In fact, overall leverage including vehicle, home, personal, credit card, etc has been going up, which is a pointer to consumerism." The share of vehicle finance to the overall retail credit pie remains the same at 11.4% over a five-year horizon. While two-wheeler loans remained the largest borrower segment, expanding to 36 million borrowers from regarding 23 million over 12 months, underscoring their role as the mainstay entry-level credit, auto loans accounted for the largest share within the wheel segment at ₹9.9 lakh crore at the end of June, growing 17.6% year-on-year. Add Now!

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(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.). Bank of barodacommercial vehicle financevehicle loanscredit risksmultiple loansauto loanscredit historyloan exposure.

Taken together, the developments around multiple vehicle loans, bigger tickets raise risk point to a situation that is still moving, and the coming days should bring more clarity.