One of the most popular trends in the finance industry today is Personal Loans. A lot of new-age individuals apply for Personal Loans to satisfy their short-term goals like travelling or purchasing gadgets. Personal Loan interest rates are also customer-friendly and with options such as EMIs and credit cards, paying them back has become easier than before.
People use Personal Loansbecause they are a better alternative to other methods such as borrowing from friends or relatives, using savings/investments or even using a credit card. If you’re planning on financing a big-ticket expense, then a Personal Loan is the way to go.
The Indian economy has seen tremendous growth over the last two years, and its benefits have extended over to the sector of personal finance as well. If you’re looking to get a loan for any reason, then you’re instantly provided with the sum you desire as long as the paperwork checks out.
Taking Personal Loans are easier because they are unsecured. You won’t need any collateral to borrow funds for the same. Also, it doesn’t restrict the usage of the funds to specific needs like a house or an education degree. You can use the money as you wish and the quickness with which they’re handed out make them a highly sought after option. Online EMI calculators also make it easier to choose an EMI that suits you best.
Here are seven reasons that convey why Personal Loansare so popular in recent times:
- Attractive and low-interest rates:
Most customers generally check out the interest rate when it comes to taking small loans. Having to pay nearly double the principal over the longer term when it comes to other big loans does not sound feasible in this scenario. Smaller loans are one of the offers that a lot of banks push out often because of the multitude of benefits they provide customers, from their standpoint.
Both banking and non-banking financial companies (NBFCs) offer low interest rates when it comes to Personal Loans. This is one of the major reasons that they’ve grown in popularity today.
Banks like PNB offers PNB Personal Loans at a very competitive rate of interest that is generally lower than many private and public sector banks. By going online, you can also compare the various interest rates and finally choose one that suits your needs. Interest rates generally begin at 12.05%
- Easier documentation:
When it comes to applying for a loan, one of the main reasons a lot of individuals back out is due to the large amount of paperwork. From signing on collateral to having an officer check out your premises to signing a ton of forms, it can become tedious and mind-numbing. However, when it comes to short-term Personal Loans, then the documentation for the same has become so much easier.
Banks now allow you to apply for your Personal Loan directly online and with this digital age of paperless loans, it becomes so much easier to process any paperwork. E-KYC forms have also made it simpler to apply for loans.
There are also many banks which offer different Personal Loans via ATMs to those who are eligible for the same. This process of making loans simpler to apply for speeds up any long paperwork process and allows for more seamless transactions.
- Simple application process:
Approvals have also become simpler than ever, making it easier to check out all loan forms much simpler. Before this process came into play, lenders used to reject applications due to the requirement of various additional documents. They would critically check all loan applications making it harder for an individual to get his application processed.
However now, lenders work towards attracting customers by making it easier to apply for the loan. By helping them improve their eligibility criteria to meet the requirements for a loan, they’ve made it easier to apply for a Personal Loan and complete the application on their own.
- Alternative to credit cards with high-interest:
Around twenty years, mortgage rates were at an all-time low while credit cards were much more expensive. Due to the recession, millions of people were living with poor credit card scores, making it harder for them to survive, let alone purchase their daily requirements.
Interest rates for credit cards used are at a high, nearly hitting 29% in some American banks. This paved the way for Fintech to come in and make it easier for people to apply for loans. With time, the economy improved, and Personal Loans had picked up enough steam to become a go-to option for those looking to borrow.
- Increasing market and easier business funding:
With entrepreneurship becoming a very popular option among a lot of people today, investors are always looking for good businesses to fund, and this has increased the scope for entrepreneurs to start taking risks. The market has also been accepting of newer ideas owing to the influx of technology, and logically, a Personal Loan will be a sought-after move for an entrepreneur.
The market for Personal Loans has also become wider by a large margin. Earlier people with online wealthier backgrounds could Apply for Personal Loans. Now, however, smaller institutions can also afford them, making the Personal Loan space an even playing ground.
- Easier repayment options:
Even repaying Personal Loans has become easier with multiple modes such as Standing Instruction (SI) and the Electronic Clearing Service (ECS). This saves time by allowing you to pay online without having to stand in long queues to pay a loan back.
There are also different enabling factors that are coupled with a growing market which make Personal Loans all the easier to apply to.
- Digitised loan applications:
Owing to loan applications online, banks have made it easier for loans to be approved with you sitting right at home. You can apply online and without having to make multiple rounds to the bank, start using the money for your use.
Thus, loans are a lot easier with banks offering some great rates online. Just apply and watch your loan get sanctioned in minutes.