Lenders tilt towards collateral-backed lending: TransUnion report

Shift towards collateral-backed lending signals risk-conscious credit growth

Lenders have shifted from unsecured to secured credit, with portfolios rebalancing towards collateral-backed lending from consumption-driven loans, TransUnion CIBIL said in a report on Wednesday.

 

According to the report, portfolio balances of lenders grew at a slower pace of 18 per cent year-on-year (Y-o-Y) in the quarter ended June 2025, compared to 25 per cent YoY a year ago, with deceleration visible across all product segments, but more pronounced in unsecured products such as personal loans (8 per cent Y-o-Y), consumer durable loans (8 per cent Y-o-Y) and credit cards (12 per cent Y-o-Y).

 

Meanwhile, the outstanding balances of secured products continued to grow by double digits, although all at a slower pace than in the same quarter a year ago, with the most significant growth being for loans against property, which increased by 23 per cent Y-o-Y, and gold loans, which increased by 26 per cent Y-o-Y.

 

“As portfolio growth moderates, the strategic pivot towards secured lending, highlighted by the robust performance of loans against property, reflects a conscious effort by lenders to drive credit expansion while managing risk,” the report said, adding that this signals a maturing credit environment where sustainability and stability are prioritised over volume growth.

 

Meanwhile, overall retail credit balance-level delinquencies across higher-balance products remained stable, indicating sound portfolio health. Among consumption products, personal loans continue to demonstrate improvement in 90+ days past due (DPD) performance. Credit card delinquencies rose 19 basis points (bps) Y-o-Y. Certain other loan segments, too, have seen a rise in 90+ DPD delinquencies, including two-wheeler loans (up 20 bps Y-o-Y), unsecured business loans (up 42 bps Y-o-Y), and commercial vehicle loans (up 50 bps Y-o-Y).