Over the last decade, the Indian financial sector has grown at a healthy rate. This can be proved by the easy availability of credit to customers. Now, it has become very easy for anyone looking for any type of loan, be it a car loan, personal loan, home loan or any other type of loan. This has been made possible due to a large number of banking institutions and NBFCS spreading their network all over India. And now, many FinTech companies are joining into this foray making loans available more easily to consumers.
Personal loans are one category that has seen good demand over the last decade. Currently, almost 28% of all credits given out by banks are towards personal loans. The demand for personal loans from working people has also been on the rise in recent years. This shows the popularity of this loan among lenders. There have been many reasons for this rise in personal loan demands.
Let’s see some of the factors leading to the high demand for personal loans:
1. The Rise of NBFCS
NBFCs are financial organizations that do not operate like banks but only are in the business of giving out credit to lenders. The number of NBFCs in India has risen substantially over the last decade and their reach has also extended to different cities in India. Many lenders who don’t qualify for loans under traditional lenders turn towards NBFCs. So, the personal loan interest rates can be marginally higher in these cases.
2. Small Ticket Size Loans
It has now become easy to get a small ticket size loan for less than ₹50,000. This has been the major growth driver for personal loans in recent years. The number of people wanting personal loans of smaller amounts is very high. Personal loans of ticket size less than ₹50,000 have grown by nearly 5 times in just 2 years at the end of FY2020. FinTech companies are dominating in providing easy small ticket size loans.
3. FinTech Revolution
India is going through a transformation phase where everything is moving online. The financial sector has also seen the rise of many FinTech companies like Paytm Money, Groww, and many more. They offer different kinds of loans and personal loans interest rates have become quite competitive. They also have a personal loan EMI calculator that allows you to calculate the EMI for the loan amount. The process of getting a loan today is also simple, fast, and hassle-free.
4. The Younger Generation
The average age of people in India is only 28 right now. This makes India a country with one of the youngest populations around the globe. The younger generation is ready to take risks and is motivated. The people aged between 18 and 36 who are working and have stable incomes make up about 50% of the personal loan takers, and this number is rising rapidly. The lifestyle of the younger generations also attracts them to meet their desires for travelling, making purchases, and more.
To Sum it Up
With the rising economy of India, more and more people are looking towards securing loans to meet their personal requirements, be it shopping, travelling, or their daily expenses. According to CARE ratings, this market is growing at a pace of 11.2% annually and is showing no signs of slowing down.
Personal loan interest rates are available at attractive rates starting at just 10.99%. This is available both at fixed and floating rates. The eligibility requirements for availing of personal loans is also very basic. You can know about all the details of eligibility by visiting your preferred lender’s website.
