Car loans surge over 35% in December

Auto financing in Pakistan rose to Rs319 billion by the end of December 2025, marking a 35.5 percent year-on-year increase from Rs. 235 billion in December 2024, as more buyers opted for bank leasing to purchase new and used vehicles.

Pakistan’s consumer financing sector continued to grow in December, with fresh data showing a notable rise across key lending categories. According to the latest figures, car financing increased by 0.3 percent on a month-on-month basis, reflecting steady demand in the auto sector despite high prices and economic pressures.

Meanwhile, loans for house building also showed strong momentum. These personal loans jumped by 10.3 percent year-on-year, reaching Rs220 billion compared to Rs200 billion in the same period last year. This steady rise indicates that more individuals are seeking financing to build or renovate homes, even in a challenging economic environment.

Additionally, credit card borrowing continued its upward trend. Credit card loans surged by 30.5 percent year-on-year, climbing to Rs182 billion from Rs139 billion recorded in December 2024. This sharp increase suggests that consumers are relying more on credit cards for everyday spending, possibly due to rising inflation and limited purchasing power.

Furthermore, overall consumer financing posted a significant improvement. Total consumer loans rose 15 percent year-on-year, reaching Rs998 billion compared to Rs868 billion last year. This broad-based growth highlights increasing public reliance on bank financing for vehicles, housing, and personal expenses.

However, financial experts caution that while rising demand reflects economic activity, it also increases household debt levels. They stress the need for balanced borrowing and responsible lending practices to ensure financial stability. Overall, the upward trend across all major financing categories signals active consumer participation in the economy as 2026 begins, despite ongoing economic challenges.