8 Reasons Why Personal Loans are Popular in India

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8 Reasons Why Personal Loans are Popular in India

In the past couple of years, there has been a spike of 26.9% in the number of personal loans

Wednesday July 22, 2020 10:21 AM, ummid.com News Network

Perosonal loan good or bad

The Indian economy has grown enormously in the past few years. The number of people availing personal loans to meet their financial and personal requirements has increased swiftly.

This sudden growth has affected the personal finance sector too as the number of individuals applying for an instant personal loan has been increasing steadily in India.

According to statistics by the Reserve Bank of India (RBI), around 96% of incremental non-food credit for the year 2018 was accounted for by instant personal loans. In the past couple of years, there has been a spike of 26.9% in the number of personal loans.

In case of an emergency, a personal loan is the best option to fulfil your urgent financial needs. Several lenders in the market offer personal loans with attractive schemes. Fullerton India is one such lender that provides instant personal loan at competitive interest rates.

An instant personal loan for self-employed and salaried individuals is both made accessible by lenders. Before applying for a personal loan, make sure to compare personal loan interest rates so that you can opt for the one that is the most suitable for you.

So, here’s a list of the top 8 reasons why personal loans are so popular in India:

1. No Collateral

A personal loan is an unsecured loan. Thus, it requires no collateral. You can easily avail a considerable amount of money without giving away your asset. It is not the case in a secured loan. The only factor that the lender considers is your potential to repay the loan and credit history.

2. Easily Accessible

With so many lenders available in the market, you can easily avail for a loan that meets all your requirements. Many lenders provide loans with extra discounts and attractive schemes. So, it is convenient to find a plan that best suits you.

3. Debt Consolidation

One of the essential reasons why personal loans have become so popular is that they assist you in clearing your debts. Bad debts are quite common, and it is such a waste of time and money to get out of the debt trap. So, you can use a personal loan to pay off your credit card dues and monthly EMIs of multiple loans. It will help in reducing your financial stress.

4. Minimal Documentation

A personal loan requires documentation such as income proof, ID proof, age of the borrower, address proof, etc. There isn’t any need for verification of the asset as no collateral is involved. The eligibility criteria are easy to meet. Just maintain a good credit score, and you are good to go. Before applying for a personal loan, you can check if you are eligible on a personal loan calculator.

5. Online Application

Thanks to technology, a personal loan can be availed from the comfort of your home. Most lenders provide all the information regarding the loan on their websites. So, you can quickly know about the loan amount you are eligible to avail. All the essential documents can be submitted online without any hassle.

6. Flexible Loan Tenure

The loan tenure ranges from 1-5 years. So, you can choose the repayment period according to your convenience. The personal loan interest rate can be a little higher for applicants whose credit scores are slightly less than 750 but have stable incomes and are able to provide sufficient documentation. However, applicants with a negative or poor credit score may be rejected.

7. Quick Disbursal

Once your application is accepted, the desired loan amount gets quickly transferred to your bank account. The whole disbursal process for a personal loan is quick and transparent. Thus, it is one of the best ways to avail funds instantly.

8. Multipurpose

A personal loan is a multipurpose loan so that you can use it for various purposes. There is no restriction on its usage. Medical emergencies, weddings, renovating your house, funding trip - a personal loan can be used for funding anything you wish.

Conclusion

The demand for personal loans has been spiking up with each passing day. With the increased cost of living, individuals are raising the bar for luxuries. Earlier, only people with a robust financial background could afford personal loans. Now, everyone can avail it. Apart from all the reasons mentioned above, a personal loan can be used for improving your CIBIL score.

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