Financial institutions, NBFCs, and online lenders in India provide unsecured personal loans to meet your diverse financial needs. Lenders assess your loan eligibility based on your income, credit score, and repayment history. In India, personal loans have existed for a long time. But its popularity has taken off in the last few years. In recent years, the number of personal loan online applications has increased exponentially.
Personal loans, after all, are readily available, unsecured, and have affordable interest rates. Additionally, they are quick and easy to access. In addition to that, you may spend the personal loan amount in any way you see appropriate. All these factors have cumulatively contributed to an increase in the number of people seeking personal loans.
Reasons Why Personal Loans Are Becoming So Popular
The popularity of personal loans is rising for a variety of reasons. Here are 5 reasons why people in India have started taking out personal loans:
Many financial institutions, NBFCs, and online lenders will accept online personal loan applications. This reduces the hassles of visiting the lender’s office and applying for a loan physically. With online loans, you can apply for a personal loan at any time from the convenience of your home. In addition to this, you get better transparency as all the details regarding your loan is mentioned on the website.
You can also compare different lender’s offers through comparison sites and find the loan offer best suited for your needs. Many online websites provide you with a loan eligibility calculator that assist you in calculating your maximum loan eligibility. This allows you to plan your loan in a much better way.
- Hassle-free application, approval, and disbursal
To submit a loan application online, visit the online lender’s website. In a few minutes, your can upload your documents. Additionally, the personal loan amount is deposited into your account after your loan is processed. The entire process—from loan application to disbursement—takes place online. You can apply this way without ever having to meet with your lender and receive your loan amount. Additionally, thanks to the quick loan disbursal, you can easily take care of your urgent demands.
In the past, Indian banks and lenders took too long to approve personal loans. Even after waiting for days and submitting a tonne of documentation, there was no guarantee of approval. But today with transparent business process, you get constant updates through emails and text messages. The lender keeps you informed about each step in the loan approval process and requests requisite information in case of any glitches.
- Debt consolidation
Unfortunately, many young Indians suffer from bad debt due to the extensive availability of numerous borrowing tools. You can benefit from a personal loan in India by consolidating your debts and building a better credit history. Personal loans also have lower interest rates than many other types of credit. Therefore, you can use this financial strategy to repay your high-interest loans.
Debt consolidation is one of the primary factors contributing to the popularity of personal loans. Several borrowers use personal loans to pay their debts. With debt consolidation, they just have to manage and repay one loan’s EMI.
- No restrictions on usage and collateral free
The main advantage of personal loans is that they can be used for any purpose. A personal loan can therefore be used to meet any financial need. It can cover expenses like travel, home improvements, new furniture and appliances, wedding costs, unanticipated medical costs, or lifestyle expenses.
One of the key reasons more people choose personal loans in this country is that they are widely available without collateral. You don’t need to offer any security, collateral, or guarantee since personal loans are unsecured. When approving a personal loan, the sole factor considered is your ability to repay the amount within the specified timeframe.
- Flexible Tenure
The normal loan repayment time for instant loans is 12 to 60 months. You can select a tenure based on what best matches your needs. You should be aware that longer-term incur higher interests. However, repaying an instant loan is easy with features like customizable repayment lengths and inexpensive EMIs, loan repayment is made easier.
Furthermore, getting an instant personal loan and paying your EMIs on time will improve your credit score. Remember that while a longer loan term results in smaller EMIs, the total amount of interest paid will be higher. You can choose repayment choices that suit your preferences and financial condition by being flexible.
Personal loans are becoming increasingly popular for several reasons. Their collateral-free nature, easier availability compared to other loan options, appealing interest rates, etc., all work in their favour.
Also, another reason why personal loans are so well-liked is that borrowers can apply for an instant or a personal loan online. You only need to present minimum documents, such as proof of your address, identity, and income, to apply for a personal loan. With such appealing features and the increasing ease of financing, the growth is personal loans is sure to rise.