personal loan popularity in India

9 Reasons Why Personal Loans Are Becoming So Popular in India

A Personal Loan in India is a kind of unsecured loan that banks, NBFCs, and online lenders offer to borrowers seeking funding for their own needs. Your income, credit score, and repayment history are used by lenders to evaluate your loan eligibility. Personal Loan in India has been available for a long time. But only in the past ten years has it become extensively used.

Several statistics indicate that during the past few years, the number of instant loan applications in India has surged. It is not difficult to understand why borrowers prefer Personal Loans. After all, Personal Loans are easily accessible, collateral-free, and have reasonable interest rates. They are also simple and quick to set up. Once again, you are free to use the loan amount however you need to. There has been a steady increase in the number of people using Personal Loans to pay for their needs

In this article, we will see why Personal Loans are becoming so popular in India.

1.    Convenience

You can submit an online Personal Loan application to several banks, NBFCs, and online lenders. Additionally, the majority of loan apps and websites show you the maximum loan amount you qualify for depending on your monthly income when you apply for a loan online. Furthermore, you have the option of uploading your documents online. After subtracting the processing charge, the loan amount is transferred right into your bank account once your loan application has been approved.

2.    Hassle-free application, approval and disbursal

In the past, Personal Loans were too slow to get approved by Indian banks and lenders. One had to submit a lot of paperwork, and wait for days on end, and even then, there was no guarantee that the instant loan application in India would be accepted, and funds would be disbursed on time. However, since the advent of online lenders like Poonawalla Finance, applying for a Personal Loan and receiving takes place in a matter of a few hours or less. You can visit the website right away to quickly submit an online loan application. Your documents can be uploaded in a few minutes. And as soon as your loan application is granted, the loan amount is immediately deposited into your account. From loan application through disbursement, the entire process is done online. You can apply in this way and receive your loan amount without ever having to see your lender. Additionally, thanks to rapid loan disbursal, you can easily take care of your urgent needs.

3.    Debt consolidation

Due to the wide availability of many loan tools, many people find themselves in debt. A Personal Loan in India can help you out in this situation by consolidating all of your debts and improving your credit history. Additionally, the interest rate for Personal Loans is lower than that of many other loans. You can therefore replace all your high-interest loans using this financial solution. One of the main factors contributing to the popularity of Personal Loans in India is debt consolidation. Many borrowers use Personal Loans to pay off credit card debt and foreclose on other loans so they can pay off just one loan EMI rather than monitoring and repaying several. Therefore, using Personal Loans to consolidate your debt can be very advantageous.

4.    No restrictions on usage

The ability to use Personal Loans to fund any purpose is its key benefit. This is not the case with home loans and vehicle loans, which can only be utilized for a certain purpose. So, unlike a home loan, which can only be used to buy properties, and a car loan, which can only be used to purchase a car, a Personal Loan can be used to meet any financial need. You can use a Personal Loan to pay for vacation expenses, house renovations, new furniture and appliances, wedding expenses, unexpected medical bills, education, buying a used car, etc. 

5.    Collateral-free

The fact that Personal Loans are readily available without any collateral is one of the main reasons more people choose them in this country. Since Personal Loans are unsecured loans, you do not need to provide any security, collateral, or guarantors to get approval for a loan. This is not the case with secured loans taken out for big purchases. Your capacity to repay the loan within the allotted time is the only criterion taken into account when approving a Personal Loan.

6.    Flexible tenure

The typical loan repayment period for instant loans is 12 to 60 months. You may choose the tenure that best suits your needs. However, you should be aware that the interest rates for Personal Loans with longer terms are significantly higher than those for loans with shorter terms. An instant loan is simple to repay. Loan repayment is made simple with features like adjustable repayment terms and low EMIs. Additionally, taking out an instant loan and making timely EMI repayments will raise your credit score. Keep in mind that a longer loan tenure results in smaller EMIs but a higher overall interest paid. So, you can be flexible and pick repayment options that suit your preferences and financial situation.

7.    Easy eligibility

Personal loan eligibility requirements are simple and clear. You must satisfy the following requirements to be qualified for a Personal Loan from Poonawalla Fincorp:

  • The borrower should be at least 22 years old at the time of loan application and a maximum of 58 years old at the time of loan maturity.
  • The borrower must have Indian citizenship.
  • The borrower must have a full-time job at a public/private limited company or an LLP.
  • The borrower must have job experience of at least 1 year with at least 2 months’ stable employment at the current job
  • The borrower must have a monthly income of at least ?20,000

8.    Minimal documentation

You don't need to provide too many documents for Personal Loans because they are unsecured loans. For Personal Loans, banks, financial institutions, and other lenders don't demand as much documentation as they do for home loans. Personal Loans are so popular because they require little in terms of supporting documents. To apply for a Personal Loan, you only need to provide the basic documentation of your address, identity, and income.

9.    Attractive interest rates

One of the very first things that clients look at when applying for Personal Loans is the interest rate. Currently, both banks and non-banking financial institutions are providing Personal Loans with lower interest rates. It starts at 10.99% making it one of the most attractive in the lending sector. Apply at Poonawalla Fincorp to obtain the lowest Personal Loan interest rate in India.

Wrapping it up

Personal Loans are becoming more popular in India for a variety of other reasons. Their collateral-free nature, easier accessibility compared to other loan options, appealing interest rates, etc., are all elements that work in their favour. Personal Loans also provide a variety of advantages, such as those mentioned in this article. Moreover, both salaried employees and self-employed people are eligible to apply for Personal Loans. So now you are aware of the most common type of loan to consider if you find yourself in need of additional finances to accomplish a short- or long-term personal goal.

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