Of late, there has been a surge in demand for personal loans in the market. The growing demand for unsecured personal loans can be attributed to several factors. Unsecured personal loans are offered by banks, financial institutions, NBFCs, etc. This type of loan is taken to bridge the gap created due to the requirement of finance. The freedom to utilize the funds procured through personal loans is a facility enjoyed by many. At a glance, the primary factors contributing to the evolution of online personal loans in India could be – instant availability, competitive personal loan interest rates, and the benefit of collateral-free personal loans.
As we witness the abundance in growth and popularity of personal loans in India, let us have a deeper insight into the main reasons to understand this recent shift.
1. Ease of availability
The personal loans offered by banks and NBFCs are readily available on the company websites and applications. The customers can verify their documents for personal loans and submit them on the online portal. Once the process is completed and the personal loan is approved, the funds are directly dispersed to the registered bank account.
2. Faster loan application and approval
Compared to the olden days, customers had to wait for several days/weeks to get the rejection or final word of personal loan approval. However, with the advancement of technology and a structured approach to availing a personal loan, this process is just a matter of a few minutes.
This way, customers can have immediate access to the funds as per their requirements without visiting the lending authority. This helps cover the emergency expenses in a smooth and hassle-free manner.
3. Multiple options
Due to the availability of many insurance providers, the customers have a series of options to choose from. After a careful analysis of the requirements and a deep dive into the budget, the personal loan plans can be compared. The customers can compare the personal loan interest rates offered by the insurance providers. Repayment terms, documentation requirements, eligibility, customer service, etc., are the other factors that can be compared. Nowadays, there is a decline in the personal loan interest rates in the market due to the ongoing pandemic, so there is a subsequent rise in the demand for personal loans. The final call should be taken to apply with such a vendor where the probability of personal loan approval is high.
4. Collateral-free personal loans
No collateral requirement – this is the key driving factor for the rise in demand for personal loans. It simply means that when an individual makes an application for a personal loan, there is no requirement to pledge any security, guarantor, or collateral to process and get approval. However, the lenders do look at the individual’s credit score.
5. Ease and flexibility in repayment
There is a liberty to select a repayment schedule best suited to the applicant’s needs. It is to be noted that the interest payment is higher for longer tenures than a shorter repayment tenure. This repayment flexibility allows personal loans to be more manageable. The applicants can calculate the EMIs using the personal loan EMI calculator and understand the approximate EMI required to be paid. The personal loan EMI calculator is available free of cost and easy to navigate. Based on the results generated by the personal loan EMI calculator and the applicant’s financial standing, a suitable personal loan plan and repayment tenure can be selected.
There is no limit or restriction to where the personal loan funds can be used. It can be utilized by the borrowers for any purpose – it could either be for a trip abroad, higher studies, debt consolidation, medical emergencies, or maybe wedding planning. This provides the desired freedom and acts as a significant advantage apart from the above factors.