Yes, the global pandemic’s second wave was a “nightmare come true”. But as they say, every cloud has a silver lining, and in India, it’s the favourable impact of Covid second wave on personal loans.
The ongoing pandemic has led to massive positive changes within the finance industry. And the biggest ripple is being seen in the personal financing sector. Personal loans grew up by 28% in 2020 compared with 33.5% in the same period in 2019. Wondering why? Read on.
RBI’s restructuring scheme
Recently, RBI announced its Covid-19 restructuring scheme 2.0 to help borrowers recuperate from the pandemic’s aftermath. The apex bank had rolled out the scheme in 2020 and reintroduced it for 2021 because of the second wave. In a nutshell, this is a one-timerestructuring option, where borrowers with outstanding debt of up to Rs. 50 crores can rearrange their repayment terms.
Thanks to this scheme, lenders are providing tenure extensions of up to two years, which is extremely helpful. Some financial institutions have also reduced the interest rate to lower the personal loan EMIamount for the borrowers. By taking away some of the financial pressure, the scheme has enabled various Covid-affected individuals, MSME owners, and retail borrowers to repay their debts conveniently.
Moreover, borrowers can also apply for a loan moratorium under this scheme, during which they won’t have to pay EMIs. Once it’s over, the repayment schedule will resume as usual. This is unquestionably beneficial for those who need finances for treatment, business operations, etc.
Digital lenders extending a helping hand
Currently, personal loans form 87% of the active loans in the country. Clearly, the personal finance industry is booming, with NBFCs and digital lenders at the front and centre.
Lenders are playing a significant part by providing quick loan approvals to borrowers through digital banking services. Most NBFCs are also offering instant personal finance online, safeguarding borrowers from stepping out and contracting the virus.
At Tata Capital, we are going a step further by verifying personal loan eligibilitydocuments on our portal itself. We also accept loan applications online and disburse the required funds directly to your bank account upon approval. So, you can meet your financial needs without difficulty.
Besides, various lenders are now providing loans at comparatively lower interest rates, which has led to an increased number of personal finance borrowers. Such efforts by lenders are reasons why the personal financing industry is witnessing remarkable year-on-year growth.
Additional Read: Will My Personal Loan Eligibility Be Impacted During Lockdown?
Safe to say, the second wave’s impact on personal capital has been positive. Whether you’re a current borrower or are looking to get funds, now is the time to take a sigh of relief.
At Tata Capital, we provide quick loans at affordable personal loan interest rates, relaxed eligibility criteria, and other favourable terms. Visit our website to browse through our personal finance offerings.