metro personal loan

Personal Loans in Metros
v/s Non-metro Cities:
Differences & Benefits

October 23, 2022 • 7872 views

The debate about the benefits that metro cities offer to people vis-a-vis non-metro cities is never-ending. Over the years, we have seen people migrating from non-metro cities to metro cities for better job opportunities, better living standards, better facilities, and other similar benefits. 

Because of the higher income potential of individuals living in metro cities, the lenders are likely to approve a higher Personal Loan to them than those living in non-metro cities. This is a typical tendency often noticed due to a relatively lower per capita income level prevalent in non-metro cities in India.

In this blog, you will learn about different features and benefits associated with a Personal Loan in metro cities and non-metro cities located throughout the country.

What are Metro Cities?

As per the census commission, a city qualifies as a metro city when it has a population of more than 10 Lakhs or one million.

Cities like Delhi, Mumbai, Chennai, and Kolkata fall under this category. Over the last few years, more cities have been added to the list of metro cities majorly due to the migration of people. Pune, Bangalore, and Hyderabad, in particular, are growing rapidly in terms of population, facilities, job opportunities, and infrastructure quality.

What are Non-Metro Cities?

Non-metro cities refer to urban areas that are not classified as major metropolitan cities. Non-metro cities are also known as Tier 2 and Tier 3 cities. These cities typically have smaller populations, less developed infrastructure, and limited economic and cultural amenities compared to metro cities.

Examples of some of the non-metro cities are Lucknow, Bhopal, Indore, etc.

Key Differences Between Personal Loans in Metro Cities Vs. Non-Metro Cities

You will find these prominent distinctions while comparing the Personal Loan terms extended to residents of metro and non-metro cities:

1. Monthly Income

Metro city dwellers are likely to face more stringent criteria to qualify for a loan. On the other hand, the criteria would be a bit lenient for non-metro city residents as opportunities for earning are limited. Also, in the latter case, the minimum income requirement is lower.

2. Interest Rates

Interest rates are comparatively lower for Tier-1 city loan applicants as they have many options. Unlike this, the competition among the lenders is not that much intense in non-metro cities. Hence, the interest rates can be higher in these locations.

3. Approval Time

A large population of metro cities apply for a Personal Loan. Hence, the processing or approval time is usually longer than expected in some cases. Contrarily, the loan agents need to handle fewer applications in non-metro cities. Thus, you can experience a faster loan processing time.

4. Loan Amount

Borrowers get a higher principal amount sanctioned as their income potential is high. For people living in Tier-2 and Tier-3 cities, the lender may not approve the desired amount every time, especially when they assess the greater risk involved.

Also, as the cost of living is relatively lower in non-metro cities, thus, financing bodies approve loan amounts judiciously.

Also Read: The Ultimate Guide to Comparing Personal Loan Interest Rates

Factors that Influence a Personal Loan in Metros Vs Non-Metro Cities

Following are some of the important factors that influence a Personal Loan:

1. Infrastructure

Generally, there is a huge difference when it comes to infrastructure in metro cities and non-metro cities. In the case of metro cities, you are more likely to find well-furnished houses and modern infrastructure with all the amenities.

Whereas, non-metro cities have fewer amenities, such as proper roads, drainage, electricity, and other basic conveniences. This directly influences the expenses of these cities, especially housing expenses.

Since housing costs (rented or owned) are higher in a metro area, an individual may need financial assistance from time to time to take care of any gaps in funding.

2. Transportation

There are various transportation options available in metro cities, such as buses, autorickshaws, suburban trains, metros, etc. On the other hand, non-metro cities have few options for transportation. Other factors like travel fare and the distance covered with the transportation also vary in both cases.

Issues like traffic and time management also influence the individual’s decision to take a Personal Loan. In metro cities, you can see people opting for cars and more high-end bikes as compared to non-metro cities due to income differences and the limited availability of choice in vehicles.

3. Living Standards

There is a huge difference in the living standards of metro and non-metro cities. Personal spendings, particularly on recreational activities and food choices, result in an overall increase in expenditure. This is a common cause of many for relying on a Personal Loan in metro cities.

Larger groups in metro cities are easily swayed by trending social needs and thus end up spending unnecessarily. This is when they rely on a Personal Loan to bring back their budget on track.

Benefits of Personal Loans in Metro Cities

These are the widely talked-about benefits of loans disbursed to citizens living in metro areas:

  • Higher Principal Amount

As you read earlier, lenders have greater confidence in people who are living in metro cities as their average income is higher. Thus, you can get high loan amounts if you are staying in a tier-1 city.

  • Many Alternatives

A cluster of banks and NBFCs exist in metropolitan zones. Therefore, you get many lenders to choose from and thus have greater chances to grab a completely personalised loan offer.

  • Better Interest Rates

As individuals living in metro cities are considered to be less risky, the lenders approve loan offers at competitive interest rates.

Also Read: Advantages and Disadvantages of Taking a Personal Loan for Job-Related Expenses

Benefits of Personal Loans in Non-Metro Cities

If you are looking for a Personal Loan from any of the non-metropolitan cities in India, then you are most likely to enjoy these advantages:

  • Personalised Service

As lenders deal with limited clients in these areas, you can expect customised solutions and more attention while being in a loan relationship.

  • Easier Eligibility

Usually, lenders extend relaxed eligibility criteria for loan applicants from non-metro cities. This happens due to various reasons like fewer income opportunities, fewer applicants, low average expenditure, etc.

  • Faster Processing

The total number of loan applications is considerably lesser compared to metro cities. Thus, financing institutions do not require much time to disburse the loan amount.

Eligibility Criteria of Personal Loan in Metro Cities and Non-Metro Cities

The eligibility criteria for a Personal Loan slightly differ between metro and non-metro cities. But generally, lenders consider several common criteria to determine an applicant's eligibility.

Here are some typical eligibility criteria for a Personal Loan for both metro cities and non-metro cities:

  • Age: Applicants should be between 24 to 57 years old.
  • Citizenship: In both cases, the applicant must be an Indian by birth.
  • Income: Usually, lenders require an applicant to earn a minimum of Rs. 30,000 per month in income to be eligible for a Personal Loan in metro cities.
  • Employment: Applicants should have a full-time job with a minimum of work experience of 1 year with at least 1 month’s job stability with the current employer.
  • Credit Score: Lenders prefer applicants with a good credit score (generally 650 or above). A higher credit score improves the loan approval chances and may lead to attractive interest rates.

Also Read: Why is a Personal Loan One of the Best Short-Term Loans?

How to Apply for a Personal Loan with Poonawalla Fincorp?

You can apply for a Personal Loan with Poonawalla Fincorp by following these steps:

Step 1: Click on ‘Apply Now’ to open the application form.

Step 2:  Enter your personal details and attach the soft copies of the documents.

Step 3: Finally, click on the ‘Submit’ button.

After verification of the provided details, your loan will be approved and disbursed quickly.

To Conclude

Irrespective of whether you are seeking a Personal Loan in metro cities or non-metropolitan locations, you must do sufficient research to avoid potential overborrowing. Also, make sure to compare the loan deals of all the available lenders. Only by following this, you can successfully get a low-cost loan. Consider Poonawalla Fincorp as a trustworthy lender and apply for a Personal Loan today to meet your financial urgencies.

Frequently Asked Questions

  • What is the safest place to get a Personal Loan?

For a Personal Loan, you must check the reviews of your preferred lender before proceeding further. Also, NBFCs and banks with a well-established lending background are often considered favourable by borrowers.

  • What is the EMI for a 10 Lakh Personal Loan?

The monthly instalments will vary depending on the agreed-upon interest and chosen tenure. For instance, you can get a Personal Loan with interest as low as 9.99% from Poonawalla Fincorp. In such a case, your EMI for a 5-year Personal Loan will be Rs. 21,242.

  • Can a Rs. 15,000 salary person get a Personal Loan?

No, a borrower needs to earn at least Rs. 30,000 per month to avail a Personal Loan from reputed NBFCs like Poonawalla Fincorp.


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. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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