Over the last few years, personal loans have become one of the most popular loan types in India. Due to easy availability and fast disbursal, Indians are taking a Personal Loan for every need, from weddings and education to home renovation and vacations. Let’s explore the main reasons behind the popularity of a Personal Loan in India.
Top 15 Reasons Behind the Popularity of Personal Loans in India
Let’s go through some of the top benefits of a Personal Loan, which makes it a popular loan type in India: -
1. Hassle-free Process
A decade ago, when things weren’t digital, the loan process was offline. You had to visit a bank or NBFC branch and submit the application form and documents for a Personal Loan. This was a very tedious process.
With the evolution of technology and the internet, things have changed. Now you can apply for a Personal Loan online through the website or the lender’s app. The process takes a few minutes and helps to access funds for emergencies quickly.
2. Convenience
One of the significant reasons a Personal Loan is becoming a popular loan type in India is its convenience. You can now easily compare the loan offers from various lenders online.
You can also use financial tools like the Personal Loan EMI calculator and eligibility calculator to check repayment obligations and eligibility for a particular lender. Thus, you can even apply for a Personal Loan from anywhere at your convenience.
3. No Collateral Needed
Personal loans are now available without collateral. This is very suitable for those borrowers who don’t have valuable assets to offer as security. The lender provides approval based on the borrower's credit score and repayment capacity.
4. Easy Eligibility Criteria
The prerequisites for eligibility for Personal loans are simple. You can easily obtain a loan from most lenders if you meet these basic requirements. You don't have to meet complicated or strict requirements to be eligible.
Lenders generally consider factors such as a minimum age requirement, steady income, a good credit score, and valid ID and proof of address.
5. Flexible Loan Tenure
Personal loans come with flexible loan tenure, ranging from a few months to years. Borrower gets the freedom to choose a tenure based on their repayment capacity and monthly income. This has made the Personal Loan very popular, as the flexibility helps repay the loan without much financial stress.
6. No End-usage Restriction
One significant benefit of a Personal Loan is that there are no restrictions on end-use. With a vehicle and home loan, you can use the loan funds only for that purpose. However, with personal loans, there is no such restriction, and you can use the loan for any purpose, such as a medical emergency or a wedding.
7. Debt Consolidation
One of the significant uses of a Personal Loan in India is for debt consolidation. The easy availability of loans makes a person fall into a debt trap. A Personal Loan can help you consolidate all your debts into a single loan. Hence, you pay a single instalment instead of multiple EMIs.
8. Medical Emergency
Despite an increase in financial awareness in India, many individuals may not have taken out health insurance. As a result, when a medical emergency arises, they might need immediate funds. Hence, many of them avail of a Personal Loan at such times to pay off medical expenses immediately at affordable interest rates.
9. Education Needs
One of the most effective uses of a Personal Loan in India is for education-related needs. With educational expenses rising significantly, not everyone can afford the upfront costs. As a result, many borrowers rely on personal loans to support these requirements.
Whether it’s paying school fees for their children or funding a professional certification course to enhance their career prospects, a Personal Loan can be helpful.
10. Wedding Expenses
Weddings in India are grand and extravagant affairs, and the trend for destination weddings has also grown. A Personal Loan helps you manage significant marriage expenses, including venue bookings, catering, jewellery purchases, and more.
11. Home Renovation
Home renovations can be expensive due to rising inflation. Depending on the specific requirement, whether you are upgrading bathroom fixtures, extending your bedroom space, or remodelling the kitchen, the costs can vary significantly. This is when you can rely on a Personal Loan to upgrade your living space without affecting your financial stability.
12. Vacation Expenses
Taking a vacation to your dream destination is no longer considered a luxury. It is regarded as a well-deserved break from your routine life. Many Indians have started taking personal loans to fund their vacation expenses.
13. Instant Disbursal
The entire loan process is now online. There is no need to visit a physical branch, and you only need to submit a few basic documents digitally. Once the lender verifies your details, the loan is disbursed quickly.
14. Minimal Documentation
Unlike other secured loans, Personal loans don’t require extensive documentation. You only need a few basic financial and bank documents for loan processing, and no property papers are needed.
Hence, borrowers find it easier to opt for it when the need for finance arises. This minimal documentation is also one of the most important reasons the Personal Loan is a popular loan type in India.
15. Flexi Loan Options
Some financial institutions now offer flexi-loan options with personal loans. This means the borrower can withdraw funds as needed and pay interest only on the amount utilised. This provides borrowers with greater flexibility when they need urgent funds but don’t have sufficient income to cover higher interest rates.
To Conclude
Obtaining a Personal Loan is quick and straightforward, thanks to the digital lending process, making it a perfect choice for your various needs. You can use a Personal Loan for any purpose, as there are no end-use restrictions. Whether it is for a wedding, travel, home renovation, or any other need, a Personal Loan can be helpful.
Looking for quick funds? If so, apply for a Personal Loan from Poonawalla Fincorp. We offer affordable interest rates and a seamless online application experience. Connect with us today for more details!
Read Also:- 7 Smart Ways to Get a Personal Loan Without Income Proof
FAQs
How to choose the lender for the Personal Loan?
You should compare the Personal Loan offers by various lenders. Take into consideration loan tenure, interest rate and processing fees. You can go for the lender that offers you the best terms.
In how much time does the Personal Loan get disbursed?
After you submit the loan application and documents, the lender will verify your details and check your creditworthiness. After that, they will disburse the loan amount immediately to your bank account.
Can a Personal Loan affect your credit score?
If you make timely repayments of Personal Loan instalments, it can help boost your credit score. However, if you default, it can affect your credit score.
Can I prepay or foreclose the Personal Loan?
Yes, you can prepay or foreclose on the Personal Loan; however, your lender may charge a fee for either option.
Can a student get a Personal Loan?
Students who don’t have a stable income may find it challenging to get a Personal Loan. However, they can apply with a co-applicant or guarantor.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply