Personal loans are one of the most popular loans available in India. Despite the availability of different loan products in the market, 77% of the working population rely on online personal loans to meet various urgent requirements. For example, in 2021, when the global coronavirus pandemic affected the life of numerous Indians, a large number of first-time borrowers took personal loans to buy valuable appliances and cars, pay credit card bills, cover medical and educational expenses, and meet other financial obligations.
Experts observed a new trend in the credit lending market in 2021. Even today, despite the government efforts to boost digital banking in India, many Indians are still disconnected from the digitization process of the country. They love to buy goods and services using cash almost every day.
Many individuals using the internet for loan application and acquisition find it significantly easier to generate their requests for loans. Simple application method, less documentation, flexible credit lending practices of banks, straightforward terms and conditions, simple eligibility criteria- all these factors increased the demand for online personal loans in India in 2021.
As covid-19 continues to affect people’s lives in 2022, industry experts predict that more people will apply for personal loans. Therefore, borrowers who take loans frequently need to keep a close eye on personal loan trends and make an intelligent borrowing decision accordingly.
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Many people wonder why personal loans are so popular among the large section of India’s working population and self-employed people? It’s time to talk about this issue in detail and discuss the advantages of a personal loan without having prejudice in mind.
An All-Purpose Loan For All Eligible Credit Borrowers
In today’s fast and modern age, people’s requirements are unlimited. Due to tremendous scientific and technological development, many new goods and services come into the market for sale every year. The new generation finds it difficult to relinquish their desire to buy a new model car, fancy mobile handsets, a wide range of modern appliances, travel to new destinations, have a destination wedding, get an education in prestigious universities, etc. They are not ready to compromise with the quality of living standards and facilities. Need to have plenty of money for all these activities, needs, and desires.
They also need to have an active bank account against their name and maintain a good credit score. Self-employed individuals must have a registered business organization with a good income flow for at least five years to apply for online personal loans. The terms and conditions of the loan and eligibility criteria vary from one lender to another. Therefore, you must study the personal loan packages of different banks and choose one with flexible terms and conditions.
The Loan Amount Is Not An Issue For Financially Stable Credit Borrowers
In India, frequent credit borrowers often argue that they don’t get the requested money from banks while applying for traditional loans. Banks constantly evaluate people’s creditworthiness, the overall ratio of monthly income and expenses, credit score, and other factors and offer a much less amount as a loan. But this is not an issue when you apply for online personal loans.
If you fulfill all terms and conditions of the loan and have enough resources to ensure timely payment of borrowed money, banks are always ready to offer you cash from Rs 50000-Rs 50 lakhs. After analyzing your overall financial condition and repayment potential, the Bank will decide the final loan amount. Borrowers with good income or financial records get the requested amount in most cases.
Everyone Loves Collateral Free Financial Assistance
For a long time, collateral placement has been an important term and condition of almost all loans. While applying for a traditional loan, borrowers have to put their expensive valuables( such as property papers, investment documents, land records, gold, bond papers, any hard currency, etc.) as collateral against the loan issued. It works as a guarantee to the Bank that the borrower will repay the borrowed loan amount with interest fees as per the agreement. But there is a side effect of this condition.
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All those individuals who don’t have any expensive property are automatically considered ineligible for traditional loans available in India. Out of 1.3 billion people in our country, approximately 76 million folks live below the poverty line. They are dependent on their monthly income from employment, and their savings are not significant. Personal loans are suitable financial arrangements for such people as they don’t have to worry about collateral placement. Banks ask credit borrowers to meet the eligibility criteria to apply for the loan.
You Can Get A Personalized Loan Product With Low Interest-Fee
Due to the rapidly growing demand for loans in India’s financial market, almost all leading banks and financial organizations are now ready to offer personalized personal loans to a large number of borrowers with a low-interest fee. It would help if you kept in mind that all banks try to connect to the growing number of borrowers as soon as possible to sell their loan products in great numbers. So frequent borrowers have the liberty to compare the interest rates of personal loans offered by multiple banks and select a loan with the lowest possible interest fees. It is always easier to repay such a loan as it doesn’t burden people’s monthly budget.
It’s Always Easy To Get An Online Personal Loan.
Gone are the days when borrowers used to visit banks several times to submit their applications for loans and complete numerous formalities. As internet penetration is increasing in India, the personal loan application process has become pretty simple. The online application method allows them to submit their application for a loan from any location, save precious time and energy, maintain the privacy of sensitive documents and data, and get a swift call from Bank executives.
To apply for a personal loan, you need to take some simple, but significant steps-
- Get more information about personal loans offered by different banks and their terms and conditions,
- Evaluate your requirement for additional money and finalize a particular loan amount,
- Collect all the necessary documents in the proper format without fail.
- Choose a specific Bank from which you want to take a personal loan.
After finalising all these details, you can start applying for a personal loan online from the comfort of your home. First, visit the website of the selected Bank, go to the application section, fill an electronic application form with all the required details, check the form for possible errors and mistakes, make corrections if required, and click the submit button.
Suppose your application carries all the required information correctly and the Bank executive considers your profile in the initial inspection. In that case, the chances are high that you will get a call from the Bank. You must respond to such a call with great attention and responsibility. Answer all the questions correctly asked by bank executives.Be confident during background checks, interviews, and verification processes.
You Can Pay Off Existing Debts With Personal Loans
For many people, it’s a bit difficult to deal with several banks simultaneously and make repayment arrangements separately. You will feel quite relaxed if you get a chance to combine all loans and deal with one financial organization. It is possible with personal loans. Many banks in India offer online personal loans with credit transfer benefits. It allows you to consolidate different loans into one debt and repay the borrowed money with lower interest fees. Such a provision helps you quickly get rid of multiple loans and saves a significant chunk of hard-earned money.
Prolonged And Flexible Repayment Facility
Repayment of borrowed money doesn’t cause stress when you take a personal loan. The credit lender divides the entire loan amount into small and equal installments and activates an automated repayment service on your bank account. It allows you to stop worrying about loan repayment. The Bank will deduct the repayment amount directly from the specified account and applicable interest charges on the due date and time. You get SMS and email alerts whenever loan reimbursement occurs. You need to keep a sufficient balance in your bank account to enjoy the benefits of this automated service.
Many banks offer prepayment facilities to all those willing to settle the loan before the official ending of the repayment date. Generally, banks issue personal loans for a maximum of 5 years. But many financially stable borrowers don’t want to get involved in the loan repayment process for 60 months. Due to multiple reasons ( like the need to permanently settle in a foreign country, huge benefits in business activities in a financial year, the possibility of division of ancestral property in coming years). For this, they need to raise a formal request with the Bank. Bank executives will demand a certain processing fee and settle the loan forever.
You Can Take A Personal Loan With The Help Of Co-Borrower
Having a good credit score is one of the main terms and conditions of taking online personal loans in India. But, it’s always challenging to maintain a good credit score at all times. Despite exercising financial discipline and taking all precautions, even a simple mistake can make people’s credit score bad. The overwhelming number of Indians are tagged with bad credit scores. So they are ineligible for traditional loans available in the country. Generally, banks will reject your application for personal loans if you happen to be a bad credit borrower. But there is a way out of this problem.
Suppose you can fulfill the essential eligibility criteria for a personal loan, convince the Bank about your loan repayment capability, and arrange a co-borrower. In that case, the Bank might consider your application for a personal loan. The co-borrower must have a solid financial record with a good income every month. He should also have an excellent credit score. A co-borrower is often called the secondary borrower of the loan. His presence reduces the risk associated with personal loans.
If the primary borrower doesn’t return the loan amount at the right time, then the Bank asks the secondary borrower to repay the borrowed money. However, not everyone seems ready to act as a co-borrower for a personal loan. Because it involves financial risks for them if you default on the loan repayment. With timely loan settlement of loans , you can repair your credit score and make a place in the good books of banks and other financial organizations.
Personal Loan Trends
Once again, different state governments have begun to impose partial lockdowns and other restrictive measures to stop the rapid spread of coronavirus in different parts of the country. Many companies have been instructed to implement work from home mechanisms or significantly reduce working hours. Despite all these disturbances, people still need money to meet at least essential needs that they can’t avoid.
That is why industry experts predict that the demand for personal loans will skyrocket in the first six months of 2022. The trend is likely to continue even after 6 months if the overall situation in the employment and business market doesn’t improve. Reduced salaries, rapidly increasing inflation and financial obligations, low business opportunities will encourage both salaried and self-employed people to apply for small personal loans and get the requested money as soon as possible. It is also believed that coronavirus mayhem is not going away any time soon from our lives.
Conclusion
Due to several reasons, many Indians applied for personal loans in 2021. Eligible borrowers were able to get the much-needed money when they were struggling with the cash shortage and had to meet unavoidable financial obligations. In 2022, there is a high probability that the demand for personal loans will skyrocket. If you want to take a personal loan in 2022, keep a close eye on the latest trends in the market, see the offers made by different banks and choose a loan package that is suitable for your budget and needs. Happy borrowing.!
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