The YoY growth in the number of personal loan users in India in 2020 increased to 34.6%. Similarly, there was a 29.2% YoY growth in the value of transactions in the personal finance sector.
With the emergence of technology in the Indian financial sector, credit demand in the past few years has seen exceptional growth as displayed by these numbers. This migration from the traditional approach of lending from financial institutions has significantly contributed to their growth, more so in the personal finance department.
Economic experts have also come forward to acknowledge the contribution of Non-Banking Financial Companies in lifting this demand and making personal loans more convenient for consumers. Where, consumers had to visit lender’s branches, queue up, and depend on manual labour for the most of the borrowing process earlier, consumers can avail instant personal loan from the comfort of their homes now.
Macroscopic view on the Indian personal finance sector –
- 134% – YoY growth in the personal loans’ volume of origination
- $1.4 billion – Value of digital remittances of personal finance
Recent findings also show the popularity of personal loans amongst consumers is primarily due to the latest trend of shrinking ticket sizes of loans. Combined with that, leading financial institutions are also offering no-contact loan availability. These phenomena are encouraging more and more consumers to get a personal loan without leaving home.
Features and benefits of an instant personal loan
Here’s how a 100% digital loan can benefit you in meeting your financial obligations –
- Sufficient loan amount
Personal loans come with varying ticket sizes, depending on how well you meet the eligibility criteria of a respective financial institution. Therefore, a personal loan serves as an ideal funding option to meet your financial requirements, both large and small.
At the same time, it does not accompany any stipulations concerning your utilisation of the loan amount. Then, you can mitigate one or multiple monetary obligations. For instance, you can use a personal loan to consolidate your high-interest debts and also utilise it for home renovation.
- Instant disbursal and no documentation
The 100% digital process of borrowing does not involve any manual intervention and is carried out entirely digitally. If you are borrowing from a financial institution for the first time, you would need to fill an application form, provide scanned copies of relevant documents, which will be verified before approval and post that, you will receive the amount in your account.
This digital process of availing a personal loan is imperative when you are securing the line of credit to address any immediate financial obligation such as a medical emergency.
- Digital remittances of personal loans amount to 95% of the sector’s transaction value in 2020.
Moreover, lenders like Bajaj Finserv provide pre-approved offers on loans to existing customers that speeds up the process of loan approval and disbursal. Alongside personal loans, these offers apply to business loans, credit cards, and a host of other financial products. You can check your pre-approved offer on loan by providing your name and phone number.
With pre-approved offers, you can get a personal loan without leaving home and within minutes.
- Repayment tenor
You can choose the period within which you prefer to repay the personal when applying for it. This decision must be based on your financial standing and how much EMI outgo can you afford without straining your finances. Most financial institutions offer a repayment tenor of up to 60 months for instant personal loans to ensure pliability.
Moreover, you can use a personal loan calculator to ensure that you are choosing the right tenor since it directly impacts the EMI amount. A longer tenor would mean that you will need to pay smaller EMIs; however, interest accrual will be high. The opposite conditions apply to a shorter tenor.
- No hidden charges and collateral
Prominent financial institutions follow a strict policy of not charging any additional fees from borrowers. All the charges, including personal loan interest rate, remain clearly stated in the loan indenture so that you can peruse through the charges you need to and might pay in the course of borrowing.
At the same time, there is no collateral involved in availing an instant personal loan; thus, cutting down on the hassle of extra documentation on its account.
- Online account management
Lastly, you can manage your loan account online from a handheld device or your PC. It is one of the reasons why you should avail personal loan.
- Total value of digital lending is expected to increase 5x up till 2023.
Nevertheless, one factor you should consider before availing an instant personal loan is how well you meet the eligibility criteria of your preferred financial institution. Some standard eligibility criteria followed by prominent lenders in India are –
- You must be an Indian citizen.
- You should hold a CIBIL score of 750 or higher.
- You must possess a steady source of income.
It is crucial to bear in mind that if you have a high credit score and monthly income, chances of approval are favourable. Nevertheless, a ready source of funds like a personal loan is exemplary in meeting urgent and also non-urgent expenses to mitigate the burden on your liquid finances.