Did you know that according to the Reserve Bank of India (RBI), personal loans today account for 28% of total bank credit? Over the past few years, personal loans have seen a surge in the Indian market. The RBI statistic is indicative of the fact that people are more confident and willing to apply for personal loan. After all, there are clear benefits to this product offering.
Let us read about the various reasons behind the popularity of personal loans in the Indian market-
• Evolving lifestyles
When compared to the Baby Boomers, millennials have a somewhat novel approach to life. Where once people used to postpone their needs due to financial crunches, the Gen-Y changed their source of funding. The awakening regarding the need for a balanced lifestyle along with the emergence of “luxury-consciousness” also contributed to an appetite for taking personal loans. This self-expressive and liberal generation does not shy away from taking instant personal loans for meeting a host of needs, ranging from emergency to leisure.
• Easy accessibility
Gone are the days when personal loans were viewed with contempt, owing to tedious paperwork, high-interest rates, lengthy application process, etc. Today, to get a personal loan, online application and documentation submission is all that is needed. Not only that, but personal loan interest rates have also become competitive, and most lenders offer high loan eligibility. This has encouraged people to see personal loans as a safety net for times of financial distress instead of a hassle.
• Economic slowdown
Economies around the world have been experiencing a slowdown for quite some time now, and the Indian economy is no different. Since the past year (2019), thousands of people have been hit by the wave of unemployment or salary reductions. This has made many despair for even basic sustenance. Moreover, under such a crisis, meeting urgent expenses has become a challenge. As a result, people have turned towards personal loans as a source for funding.
• No Specific Use-End
Another big reason for the popularity of personal loan in India is perhaps the fact that it is a highly versatile loan option. Where home loans can only be taken to purchase a home, personal loans come with no restrictions regarding their usage. By availing a personal loan online, one can fund a wide range of financial needs, from medical expenses to college fees to debt consolidation.
• No Collateral Required
Finally, the increasing popularity of personal loans India can be attributed to the fact that it is an unsecured loan option. Meaning, no collateral is needed for the amount borrowed. However, the applicant needs to prove their repayment capacity to meet personal loan eligibility.
Do you also wish to take advantage of this popular loan option? If yes, then apply for personal loan with India’s leading lending institution, Tata Capital. We offer instant personal loans at competitive interest rates, with flexible repayment options.
Use our online personal loan EMI calculator to determine your EMI amount in advance. To know more about our personal loans, visit our website today!