Personal loan, whether a 50000 loan amount or a 5 lakh loan, is one of the financial avenues that quickly provide access to sufficient funds for various purposes. You can get one for higher education, travelling, medical expenditures and others. This perhaps is one of the crucial reasons behind their rising popularity.
However, there is more! If you are looking to apply for a personal loan, ensure to consider the listed points:
No requirement of security or collateral
Demand for personal loans stems from the major fact that it is an unsecured loan option. This means you do not require pledging any guarantee or collateral to avail it. Mortgaging typical security like savings or property can result in stress but not when you are applying for a personal loan.
The major parameter that lenders factor in before approving personal loans is your credit score. A good score proves your credibility and your repayment capacity, thus assisting you in securing your personal finance. You even can build a strong credit score by repaying your card bills or your ongoing loan EMIs by the due date.
Low personal loan rates
While it is true that the COVID pandemic has lowered economic activities globally, it has even brought little good news for the potential loan seekers in relation to loan return on investments. Personal loan rates are more affordable than they were years back. Thus, now is a good time to apply for a loan. An affordable rate of interest means that you can end up paying your EMIs comfortably.
Your lending institution does not require knowing the exact reason behind availing of the personal loan. To put this simply, you can avail loan to meet any of your expenditures, ranging from financing a wedding to travelling the globe to renovating your house. If you hold a decent score and can match other crucial eligibility parameters put forth by the lending institution, you can avail of the personal loan in a hassle-free manner.
Online loan application possible
The next reason behind personal loan popularity is that you can place the online application with minimal documentation. All you require doing is visiting the lender’s site, filling up the digital application form, waiting for the approval, submitting the soft copy documents, and you are done.
However, to make it happen, you require a lending institution that provides a seamless digital experience. In case your present lender witnesses a glitch prone portal, we advise you to switch to any other lending institution before you place the personal loan application.
Why is there a rise in personal loan demand?
As the indebtedness of the average Indian grows, you cannot avoid the surge in retail loans over the last 5 financial years. As you cast your eyes on the rise in the number of loans, it is observed that the retail loans have clocked up a CAGR compounded annual growth rate of about 16.4 percent. But the CAGR of the loan accounts is only 7.5 percent. It is an indication of the rise in loan value by account.
How much do Indians borrow?
The average rise in borrowings by Indians surpasses the growth in what the income will warrant. It can be inferred from a comparison of the per capita loan proceeds versus per capita gross domestic product (GDP) growth. According to the financial year 2018, the growth rate per capita GDP is 8.50 percent, while per capita loan proceeds rose to 17.9 percent. There is sufficient evidence that average Indian borrowings may exceed the growth in what income will warrant. It can be inferred from a comparison of per capita loan proceeds versus per capita gross domestic product (GDP) growth. According to FY 18, the growth rate of your per capita GDP is 8.5 percent, while per capita loan proceeds are enhanced to 17.9 percent. There is sufficient evidence that the average Indian does not detest spending and borrowing.
Unbridled growth in the loans for lenders and non-banks like instant cash loan applications signals growing consumerism. Private and public banks also are happier lending to retail borrowers. Saddled by dud corporate loans, financial institutions now are extending flexible loan options. The ratio of poor loans historically has not been over 2 percent, while those for industrial and farm loans are far higher. Additionally, credit scores and instant cash loan applications have made this easier for individuals to get loans from the comfort of home.
What are Indians borrowing for?
The sharpest growth in indebtedness is observed in the unsecured personal loan. Young Indian applicants are availing EMIs to meet their desires ranging between luxury goods and international travel. Also, Indians are increasingly spending on discretionary expenditures like electrical appliances, vehicle upgrades, home furnishings etc.
There are no major delinquencies despite a rise in the rate of interest. This is because when a high rate of interest from banks is pinched, the seekers of unsecured loans move to cheaper and short-term loans from the NBFC. The rise in the rate of interest even has pushed retail loan borrowers toward instant cash credit options, which provide quick loans at a lower rate of interest. This also has been facilitated by financial institutions that tap into distinct kinds of credit. Growth of the online lenders, eKYC norms, and digital expansion enabled lending technologies are the catalyst for the increase in demand for loans.
Given how affordable and accessible personal loan is today, you no longer require postponing your wants or needs. However, what you do require is turning to one of the most reliable lending institutions like State Bank of India, HDFC, Axis Bank, Tata Capital, Bajaj Finserv, Punjab National Bank, and Indian Bank, RBL Bank to begin your personal loan application online. We provide you loans at an affordable rate of investments (ROIs), minimal documentation and flexible repayment tenures. Thus, what are you waiting for? Ensure to check out the personal loan eligibility criteria, compute your potential EMIs through the online personal loan EMI calculator and place the application today.
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