The scenario of personal loans in India is changing constantly in a smooth manner. The lending and borrowing processes of personal loans are getting easier and quicker. With the increasing popularity of digital finance in the country, personal loans have become accessible to almost every person. The personal loan segment of the nation has grown extensively over the years due to this high accessibility.
Contemporary Trend of Personal Loans in the Country
Personal loans have always been sought out by borrowers because they are unsecured and one does not have to mention the reason for taking the loan. As a financial product, it has attained higher demand over the past few years due to its changing trends. Let us take a look at how financial products, especially personal loans, have evolved over the years:
1. Lenders are getting competitive: Earlier, most banks and non-banking financial institutions used to check personal loan applications disparagingly. Many lenders used to reject applications or make applicants get additional documentation to prove repayment capacity. The scenario has changed now. Lenders want to increase personal loan sales extensively in order to boost their overall loan sales and, in turn, their revenue. Personal loan providers have tough competition and hence, each lender is working towards attracting customers by simplifying the application process. Therefore, bank representatives and banking relationship executives are helping applicants in improving their eligibility criteria for personal loan and completing the loan application successfully.
2. Personal loan applications can be made digitally: With the help of online loan applications, personal loan sales are increasing on a daily basis. Borrowers do not have to anymore go through a time-consuming and tedious process for getting their loan approved. You can simply sit on your bed at home and apply for a personal loan online by visiting a bank’s official website or a third-party financial website. You will be able to compare features of different loans and complete the entire application process in a few minutes. Earlier, one had to go to a branch multiple times in order to get the loan amount from the bank. Nowadays, everybody has a mobile phone and can easily apply for a loan without any hindrance.
3. Personal loan expenses can be evaluated before applying for one: You can now get a precise picture of how much you will spend for your personal loan. Before you select a loan, you can calculate your equated monthly installments (EMIs) with the help of an online tool known as personal loan calculator. Using this tool, you will be able to know what your EMI will be for different loan amounts and tenures. You can then decide your loan amount depending on your repayment ability and requirement. Earlier, one did not have online EMI calculators. One had to make calculations manually which had the risk of errors.
4. Lenders are charging attractive interest rates: Keeping the customers in mind, both banks and non-banking financial corporations charge reasonable interest rates for personal loans. This availability of low-interest personal loans has played an important role in improving the personal loan sector of the country. When you apply online, you will be able to compare various interest rates and then choose the most appropriate one. The interest rate for personal loans typically starts from 10.85%.
5. Personal loan options are available for different categories of borrowers: Banks now have different personal loan options for different categories of individuals depending on their incomes and employment status. There are exclusive personal loan products for pensioners too.
6. Personal loans help in enhancing credit score: A personal loan will assist you in building your credit history. If you apply for a personal loan and repay it promptly, you can boost your credit score easily. When you maintain a good credit score, your other debt applications will also get approved easily.
7. There are several personal loan repayment modes: One can now repay his or her personal loan through multiple payment modes such as Standing Instruction (SI), Electronic Clearing Service (ECS), net banking, etc. This is very helpful to borrowers as they do not have to wait in long lines to repay a loan like before.
Due to the high demand for personal loans and the existence of so many lenders, each lender implements innovative plans to sell more loans through digital modes. Whether you want to compare loan options, apply for a loan, or clear the loan dues, the process is very smooth. The main elements that continuously transform personal loan applications include promptness and paperless procedures.
(This post has been contributed by Bankbazaar.com)
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