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HDB Financial unsecured lending gets a boost as borrower overleveraging eases

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HDB Financial unsecured lending gets a boost as borrower overleveraging eases

The NBFC had earlier calibrated unsecured BL/PL disbursements in response to rising borrower-level overleveraging. As a result, its unsecured portfolio contracted 8% year-on-year at the book level in Q1FY27.

HDBFS’ unsecured BL/PL rejection rate in Uttar Pradesh has fallen to around 55% from 70% in January 2026. UP unsecured BL/PL disbursements have improved sharply since April, with July reaching monthly peak levels seen in FY25. Borrower-level overleveraging has declined over the past six months, with new customers carrying fewer live loans. HDBFS’ UP portfolio grew 16% YoY in Q1FY27, ahead of 12% growth in its overall portfolio.

HDB Financial Services (HDBFS) is seeing signs of recovery in unsecured lending in Uttar Pradesh as borrower-level overleveraging eases, with rejection rates for business and personal loans falling to around 55% from a peak of 70% in January 2026. The decline in overleveraging has resulted in significantly fewer live loans among new customers compared with six to nine months ago, allowing HDBFS to improve disbursements in the state. Select fintech lenders that had previously provided easy credit have also materially scaled back lending, according to an analyst report by ICICI Securities. HDBFS had earlier calibrated unsecured BL/PL disbursements in response to rising borrower-level overleveraging. As a result, its unsecured portfolio contracted 8% year-on-year at the book level in Q1FY27. Advt

However, disbursements in Uttar Pradesh have improved sharply since April 2026, with the rejection rate declining to around 55%. July was better than expected, with UP's unsecured BL/PL disbursements recovering to the monthly peak levels seen in FY25.


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