Commonwealth Bank of Australia's personal loan arrears have risen to 1.72%, according to reporting by Kalkine. Arrears means the share of borrowers who have fallen behind on their repayments.
This is an Australian story, so it won't change your EMI in India. Still, it's a handy reminder of how a lender's bad-loan numbers can climb. It's also a good moment to check your own loan habits.
Key takeaways
- Kalkine reports that Commonwealth Bank's personal loan arrears have risen to 1.72%.
- The news is about Australia, so Indian EMIs and rates are not affected.
- Rising arrears usually mean some borrowers are struggling with repayments.
- A safe EMI is usually under 40% of your monthly income.
- A small cash buffer is your best protection against missed payments.
What loan arrears mean in simple terms
A personal loan is money you borrow without pledging any asset. You repay it in fixed monthly instalments, called EMIs. EMI stands for equated monthly instalment.
When you miss an EMI, the loan becomes overdue. Banks count all such overdue loans as arrears. If 1.72% of loans are in arrears, then about 17 out of every 1,000 loans are behind on payments.
The headline doesn't say how long those loans have been overdue. So we can't say how serious each case is. A loan a few days late is very different from one that's months late.
In India, RBI rules say a loan unpaid for 90 days is usually treated as a non-performing asset. That is the point where a bank formally calls it a bad loan.
How this affects borrowers: a worked example
Let's see why a missed EMI hurts so much. Say you borrow ₹5,00,000 at 14% a year for 3 years. Your EMI comes to about ₹17,088.
Over 36 months, you'd repay about ₹6,15,168. That means roughly ₹1,15,168 goes to interest. If you miss payments, you also face late fees and penal charges on top.
A missed EMI can also lower your credit score. A lower score makes your next loan costlier or harder to get. So one slip can cost you for years.
The share of your income that goes to the EMI matters a lot. Here's how the same EMI looks at different salaries.
| Monthly income | EMI | Share of income | Comfort level |
|---|---|---|---|
| ₹40,000 | ₹17,088 | 43% | Stretched |
| ₹50,000 | ₹17,088 | 34% | Manageable |
| ₹60,000 | ₹17,088 | 28% | Comfortable |
| ₹80,000 | ₹17,088 | 21% | Very safe |
Who is affected
If you live in India, this news doesn't touch your loan directly. Indian banks follow RBI rules, and their loan books are separate. Your EMI only changes if your own lender changes its rate.
Still, the story matters to a few groups:
- Anyone planning a personal loan in the next few months.
- Borrowers who already pay more than 40% of income as EMIs.
- People with several small loans or card dues running together.
- Families with relatives or investments linked to Australia.
Rising arrears often show up when living costs climb and household budgets get tight. That pattern can happen in any country. So the lesson travels well, even if the numbers don't.
What to do now
You don't need to panic or change anything because of a foreign bank's data. A few calm steps will keep your own loans safe.
- Add up all your monthly EMIs and divide by your income.
- Try to keep that share under 40%.
- Set up auto-debit so you never miss a due date.
- Keep two months of EMIs in a savings account.
- Talk to your lender early if you expect trouble.
Before you borrow, test the numbers with an EMI calculator. You can also run an eligibility check to see what you can afford. Our personal loan guides explain fees and rates in plain words. For more stories like this, visit the news hub.
Frequently asked questions
What does a loan arrears rate of 1.72% mean?
It means about 1.72% of the loans in that group are behind on payments. That's roughly 17 loans in every 1,000.
Will this affect my personal loan EMI in India?
No. The report is about an Australian bank. Your EMI depends on your own lender's rate. It also depends on the RBI repo rate, which is the rate at which RBI lends to banks.
How can I avoid falling into loan arrears?
Keep your total EMIs under 40% of income. Use auto-debit, and save a buffer of two EMIs. If money gets tight, call your lender before you miss a payment.
BankCreds analysis
Don't over-read this headline
A move to 1.72% sounds scary, but it's still a small share. Roughly 98 of every 100 rupees of such loans are being paid on time. Banks also plan for some bad loans, so one reading rarely means trouble for the whole system.
For an Indian household, the Australian figure changes nothing in rupees. Your EMI, your rate and your credit score stay exactly as they were. Your own habits matter far more than this headline.
Take a borrower with a ₹17,088 EMI and a ₹50,000 salary. That EMI takes about 34% of income. One surprise bill can break that balance. If so, build a buffer of two EMIs, about ₹34,000, before you take any new loan. That's a better use of this week than worrying about a foreign bank.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Kalkine — originating report https://kalkine.com.au/news/financial/cba-share-price-watch-commonwealth-bank-asxcba-personal-loan-arrears-rise-to-172
- RBI Master Directions — RBI rules on how Indian lenders classify overdue loans https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx
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Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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