Here’s Why Personal Loans are So Popular in India
A personal loan is an unsecured loan that you can get from a bank, a non-banking financial institution or online to fund your personal needs. Personal loans have been available in India for several decades, but they have only recently grown increasingly popular. Several data show that the number of personal loan applications has increased over the last decade, and there are several explanations for this.
After all, a fast personal loan requires no collateral, is available immediately and has low-interest rates. Furthermore, they are quick and straightforward to obtain, and you are free to use the funds in any way you see fit.
Given the significant rise of personal loans in India, let’s see why they are becoming increasingly popular.
Unlike home or vehicle loans, which can only be used for a specific reason, you can utilise the personal loan amount for various objectives. It can be used for multiple things, including weddings, medical emergencies, house renovations, and vacation funding. One of the main reasons for a personal loan’s appeal is its widespread use. You have complete freedom to use your loan to fund any planned or unanticipated project.
You do not need to submit a huge amount of paperwork to acquire an immediate personal loan. Unlike home loans, financial lenders do not require asset verification for personal loans. However, if you apply for a personal loan, you will be required to provide proof of identification, address, and income.
Consolidation of debt
Personal loans have been popular for various reasons, one of which is that they aid in debt reduction. Many consumers choose a personal loan to pay off high-interest credit card debt. Instead of juggling numerous EMIs, you might utilise the personal loan funds to foreclose other loans.
No requirement for collateral.
Personal loans are usually unsecured loans, so you don’t have to put up any assets or collateral to get one. Instead, your repayment abilities and credit history are the only essential factors the lender considers. That isn’t the case with large-ticket loans, such as mortgages.
Easy online availability
Several NBFCs and online loan aggregators provide websites or applications that allow you to apply for a fast personal loan online. You can also have your documents verified online without uploading or submitting them. The loan amount is directly paid into your bank account once you have received approval.
Loan application and approval in a few minutes
Traditional banks were renowned for taking a long time to approve loans. You had to wait several days for the final word on whether your loan was approved or denied. On the other hand, online loan applications from NBFCs take less than 2-3 minutes. So if all goes well, you might get an instant personal loan.
The entire process takes only minutes to complete, from application to disbursement. Furthermore, the speedy loan approval and disbursement allow you to meet your emergency needs quickly and easily.
Availability of many options
There are so many personal loan lenders in India that you have many options. You can shop for an online personal loan and pick the best fit for your needs and budget. First, compare lenders by loan amount, interest rate, repayment periods, eligibility restrictions, documentation requirements, customer service, etc. Then, apply to one lender where you have the best chance of getting approved.
Simple Eligibility Criteria
Personal loan eligibility requirements are simple and basic. To be considered for a personal loan, you must meet the following criteria:
- You should be aged between 25 and 58.
- You must be an Indian citizen.
- You must be a salaried employee with at least 25,000 monthly income.
- You have been employed in a steady job for at least six months and have 12 months’ work experience.
Option of flexible repayment
Lenders offer personal loans with repayment terms ranging from 12 to 48 months. You can select the repayment period that is most convenient for you. However, keep in mind that the interest expense for a longer loan term is much more than a shorter one. As a result, personal loan repayment is made much easier with flexible repayment alternatives. For more interesting info, Please Visit Sonyliv Com
Improves applicant’s credit score
If you take out a personal loan and pay off the EMIs on time, it can help you enhance your credit score. Your credit score is an essential factor lender consider when determining your creditworthiness. In addition, a good credit score will make you eligible for low-interest personal loans.
HOW DO I GET A PERSONAL LOAN?
- Given the numerous reasons why personal loans are becoming increasingly popular in India, if you are considering applying for one, take these steps:
- Go to your bank website or various fintech platforms sites.
- Check your credit score to see whether it’s higher than 725.
- Fill out the online application for a loan.
- It only takes a few minutes to verify your loan documentation online. However, if your KYC has not been updated, you will be required to give certain information.
- Accept the loan offer once you’ve received your loan approval.
- Activate the e-mandate to ensure timely EMI payments.
The points mentioned above are only a few reasons why personal loans in India are the preferred source of credit for many people. Always compare personal loan interest rates before applying for a personal loan, whether online or offline. Also, to better control your monthly spending, use the personal loan EMI calculator provided by lenders on their websites.
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