CA warns how 'no-cost EMIs' is keeping Indian middle class broke: ‘If you have to borrow for 36 months, you cannot afford it’

No-cost EMIs can make expensive purchases appear easier to manage, but CA Nitin Kaushik has warned that the convenience can come at the cost of long-term financial flexibility. From five-year car loans to credit card EMIs for phones and vacations, he argues that easy access to credit can encourage people to spend future income on lifestyle upgrades today. In a post on X, Kaushik highlighted how normalized retail debt could leave young professionals financially stretched before they build meaningful wealth.

CA Nitin Kaushik warns about the EMI trap

CA Nitin Kaushik took to X to share his concerns about the growing reliance on no-cost EMIs and consumer debt. He began with a blunt claim that “no cost EMIs are keeping the Indian middle class permanently BROKE.” According to Kaushik, the problem is not simply the EMI itself. It is the way easy financing can make purchases feel affordable when the underlying cost may still put pressure on a person's future income.

Why five-year car loans and credit card EMIs can be risky

Kaushik pointed to common examples of borrowing for lifestyle purchases, including five-year car loans and credit card EMIs used to pay for expensive phones and vacations. He argued that these financing options can encourage consumers to make immediate lifestyle upgrades by effectively “pledging their future salaries” to pay for them.


The purchase may provide instant gratification, but the monthly repayment continues long after the excitement of buying the product or taking the trip has faded. For young professionals, repeatedly taking on such commitments can leave less money available for savings, investments and unexpected expenses.

‘Retail debt has become so normalized’

Another concern raised by Kaushik is how routine consumer borrowing has become. He wrote that “retail debt has become so normalized” that young professionals can end up sacrificing their financial flexibility for depreciating assets.

Cars and electronic gadgets, for instance, generally lose value over time. Yet the borrower continues making repayments even as the asset itself depreciates. Kaushik's warning is particularly focused on people who take on consumer debt before establishing what he calls a “baseline net worth.”

Building savings and investments first can provide a stronger financial cushion, whereas accumulating EMIs early can lock a portion of future income into existing commitments.

Kaushik's 36-month affordability test

Kaushik offered a simple way to think about whether a purchase is genuinely affordable. “If you have to borrow money over 36 months just to afford a consumer gadget today,” he wrote, “you cannot actually afford it.” The point behind the statement is that affordability should not be judged solely by whether a monthly EMI fits within the current budget.

A purchase may technically be payable in instalments while still being too expensive relative to a person's income, savings and overall financial position. For Kaushik, the bigger issue is what happens to financial freedom when several such payments accumulate.

The bigger warning about lifestyle inflation

Easy financing can blur the difference between being able to pay for something and being able to afford it. A person may be able to manage a monthly payment for a new phone, car or holiday, but doing so repeatedly can reduce the amount available for building wealth. Kaushik's warning therefore centres on the opportunity cost of consumer debt. Money committed to EMIs cannot simultaneously be used for savings, investments or other financial priorities.

His argument is that young professionals should be particularly cautious about turning every salary increase into a reason to upgrade their lifestyle through borrowed money.