Personal loans account for about 96% of the new bank loans during FY 2018. It won’t be wrong to say that the personal loan sector is growing with every passing day and will continue doing so. With digitization in almost everything today, a personal loan has become accessible to almost everyone. There has also been a sharp increase in the number of fintech companies. They are making it simpler for every individual to get these loans. The growth has been rapid and personal loans are definitely here to stay.
A few reasons that have contributed to the increasing popularity of personal loans-
– Changes in the average lifestyle:
Then comes the fact that today’s lifestyle is more inclined towards making our lives easier and luxurious. Thus, this lifestyle often requires expensive appliances or services. This has led to a sharp rise in the expenses of an average man. Thus, the requirement for extra money which they can repay in installments later.
– Shattering of the high-interest rate taboo:
Earlier, a personal loan used to be associated with higher interest rates as it is an unsecured loan. But with time, this fact has also changed. Personal loans today are available at rates as low as 10.75% which makes it more appealing to the future audience.
– Increasing market:
Until a few years back, personal loans were availed by people who had a strong financial base. But today the ticket size has reduced to the extent of being afforded by smaller financial institutions. And their customer base is widespread.
– Tonnes of options:
Innumerable institutions with neck-to-neck offers are available for every individual at every point in time. The customers have the liberty to decide which one they want to associate with. Instead of them asking for these banks to give them a loan.
– Increased financial awareness:
The people today are less scared of taking a personal loan or exploring any financial scheme. Especially less than they were about 10 years ago. The hesitance has morphed into interest and has been well tapped by the industry pioneers in time.
They say that the future is uncertain and no one knows what might happen tomorrow. Having said that, we have spent years into analyzing trends and developing various sciences. Hence we can always predict things to a certain extent at any point in time.
Here’s our prediction regarding personal loan-
– Business funding:
Since the government has been laying a lot of emphasis on the importance of entrepreneurship. A lot of people are taking a keen interest in becoming their own bosses. While there is an enormous number of investors who are constantly on the lookout for promising businesses. Not every person who sets foot in the industry is able to arrest the attention of these investors. But quitting is definitely not a trait of an entrepreneur. Hence they will turn to a personal loan to fuel the first kick to their businesses.
– Minimalistic Documentation:
Digital lending is evolving at tremendous speed and the day isn’t far when the process becomes 100% paperless. From e-KYC to disbursal, the process is going to get more seamless and hassle-free. This would also mean that people can receive loans from the comfort of their homes. Thereby increasing the number of people opting for it.
– Government and Finance:
Currently, there are strict laws regarding bank regulations and the rates that they incur. These laws might become more lenient owing to the fact that the people in the government and the country as a whole is getting educated in the sector and the benefits that they hold. It will outweigh the risks associated with it.
The world of finance is no longer a toddler. It has become an aggressive adolescent who is constantly going through changes. It does not shy away from trying new things that seem to catch its attention. So it is definitely going to be interesting to see what the future holds for us. Do you have any predictions for a personal loan? Let us know in the comments!
