Personal loans are a multipurpose source of finance that help you meet your financial obligations with ease. They are collateral-free loan options that can be availed at the earliest with minimal documentation in most cases. Given their ease and convenience, personal loans have become the go-to solution for many and numbers back this fact.

CRIF Highmark is a reputed credit bureau in India. It allows you to check the CRIF score when applying for a loan. You can also access the CRIF credit report for a detailed analysis of your credit history. CRIF Highmark published its Credits cape Report recently. The report outlines the growth of personal loans in India between the financial year (FY) 2017 and 2021. Let’s have a look.

CRIF report on the rise in personal loans

Here’s what the report has found:

Overall size of the loan market in IndiaRs.156.9 lakh crores as of 31st December 2018
Composition of lendingRetail and commercial lending – 49% Microfinance – 2%
Personal loan portfolio (outstanding)Rs.644.6 thousand crores as of 31st March 2021
Market share of banks in disbursing personal loansPublic-sector banks – 43% Private sector banks – 37.4% Non-Banking Finance Companies (NBFCs) – 15.3%
Borrower demography (in financial year 2021)Age below 25 years – 4% Age between 26 and 35 years – 35.3% Age between 36 and 50 years – 40.7% Age above 50 years – 20%

Other important findings of the report include the following:

  • NBFCs dominate the loan market in small-ticket personal loans, i.e., loans below Rs.1 lakh. NBFCs account for 28.8% share of the market by value and 65.7% by volume
  • Between financial year 2107 and 2021, personal loan grew 2.3 times by value and 3.8 times by volume
  • In financial year 2021, the average ticket size of the loan stood at Rs.1.5 lakhs
  • Almost 40% of the borrowers are below 35 years of age

What does the CRIF report indicate?

The CRIF report makes it abundantly clear the personal loans have become the favoured choice for borrowers when they need funds. Both millennials and adults are driving the popularity of the loan. Moreover, in FY 2021, about 19% of the personal loans sanctioned were for New to Credit (NTC) Borrowers, i.e., borrowers who were availing credit for the very first time. Personal loans, thus, found favour among new borrowers too.

Reason for the jump in personal loans

The CRIF report makes one wonder why the popularity of personal loans grew so much in recent times. The answer is simple – due to the multiple benefits which these loans provide. Here are some of the benefits of the loan which make it the go-to solution –

  • Easy availability

Public and private sector banks as well as NBFCs offer personal loans to interested borrowers. You can get the loan online, even through your Smartphone. The loan application process is easy, and it is also sanctioned at the earliest. So, if borrowers have urgent financial needs or if they want a hassle-free and easily available loan, they turn to personal loans.

  • Collateral-free

Personal loans are unsecured loans which do not require any collateral security to be mortgaged. You can, thus, retain your assets and avail of the loan simply based on your income.

  • Flexible repayments

Most lenders allow personal loans for tenures going up to 5 or 6 years. You can, thus, choose a suitable tenure for repaying the loan affordably.

  • Easy eligibility and documentation requirement

Lastly, the eligibility parameters for the loan are quite simple. You just to be of minimum age, have a source of income and a good credit score and you become eligible for the loan.

Even when it comes to documentation, personal loans are quite hassle-free. A few KYC documents are needed to get the loan sanctioned like your identity proof, address proof and bank details. The paperwork is greatly reduced making it quicker for you to get the funds in your account.

The bottom line

The next time you do a CRIF credit score check, also glance at the latest Credits cape report published by the company. The report gives you an insight into the lending ecosystem of India. You can find how different types of loans have grown over the last few financial years.

The latest findings show impressive growth in personal loans in India. Being a multipurpose loan with various benefits, personal loans can be the solution for your financial woes too.

So, if you need funds for your personal needs, don’t put a dent in your savings. opt for a personal loan instead and fulfil your financial obligations easily.

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