Millennials today are more aspirational, tech-savvy, and risk-taking in their approach. They tend to spend on ticking off goals from their bucket lists, the sooner the better. Consequently, millennials take more interest in managing their finances. They take more credit risks and avail loans for different purposes.
Multiple studies about the borrowing behaviour of millennials have brought to light an interesting trend – women opting for loans more often than their male counterparts. Let us see the reasons behind this striking trend.
More Women in the Workforce
The number of working women in India has risen steadily. Several millennial women are rapidly entering the workforce and becoming financially independent. They are in control of their finances and hence are comfortable in taking credit risks to meet their goals. Thus, we see them signing up for loans for women to cater to several personal and business needs.
The Millennial Lifestyle
Millennial women believe in ticking goals off and do not hesitate to spend. They frequently avail credit for travel, shopping, electronic purchases, weddings, etc. Loans for women give them the confidence to manage expenses and meet personal needs. In fact, women entrepreneur loans are also growing in popularity as many are leaving cushy jobs to pursue entrepreneurial ambitions.
Higher Credit Scores
It has been observed that women take extra care while repaying loans and rarely default. According to a study undertaken in 2018 by TransUnion CIBIL in credit landscape, about 38% of women check their credit scores regularly. On average, women have a 770+ CIBIL score. As the number of credit applications by women goes up, lenders approve loans for women easily and frequently.
Dedicated Loan Products
Lending institutions are now coming up with an increasing variety of loans for women. Home loans, two-wheeler loans, gold loans, business loans for women, and personal loans are aplenty and also offer special incentives to women. Relaxed eligibility criteria, bias-free processes, and attractive interest rates attract more millennial women towards loan products. In such encouraging times, financially aware millennial women do not hesitate to avail loans.
Rising Entrepreneurial Ventures
The growing start-up culture in India is witnessing increased participation from women entrepreneurs. Millennials are, thus, availing start-up business loans for women that allow them to run and grow small businesses. Business loans for women can be used for everyday business affairs, talent acquisition, growth and market expansion. These loans help millennial women realise their entrepreneurial ambitions. What’s more, flexible tenures, attractive interest rates, and online application processes attract businesswomen to choose business loans over other sources of funding.
These are only some of the reasons behind women warming up to external funding for both personal and professional reasons. In the future, we’ll only see this trend grow as women continue to embrace financial independence.
At Tata Capital, the process of getting a loan for women is quick and hassle-free. Connect with us to know more about loans like home loan, personal loan and start-up business loans for women.