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Why is there an increase in demand of personal loans?
- Updated on: 25 May 2023
- Published on: 11 Dec 2019
Table of contents:
India’s credit sector witnessed a boom in the past few years, currently set at an 11-year high. But why is there a great demand for loans or credit? One reason is easy accessibility, and this is mainly due to digitisation of services and the growing fintech arena.
However, there are other reasons for the rise in demand for instant personal loans and other similar credit solutions. Read on to know more.
As per reports, the lending market of the country grew by 11.10% in FY 2022. This statistic in itself suggests that the average Indian does not shy away from borrowing funds. The unbridled growth in loans for banks as well as for non-banks such as instant cash loan apps signals growing consumerism.
Public and private banks are also happier lending to retail borrowers. In fact, lenders are now extending flexible loan repayment options. This makes it far easier to avail, especially since trusted lenders no longer have strict requirements. Moreover, credit scores and instant cash loan apps have made it easier for individuals to avail of loans from the comfort of their homes.
Unsecured personal loans witnessed a sharp growth, as young borrowers opt for EMIs (equated monthly instalments) to fulfil a variety of their needs. These range from international travel to luxury goods. Indians are also increasingly spending on discretionary expenses such as vehicle upgrades, electrical appliances, house furnishings, etc.
There have been no major delinquencies despite an increase in the interest rates. One reason for this is that when the high-interest rates from the banks pinched the borrowers of unsecured loans, they moved to cheaper, short-term loans from non-banking institutions.
The increase in interest rates pushed retail borrowers towards instant cash loans, which offer quick loans at lower interest rates. Institutions tapping into different types of credit further facilitated this push.
In addition to this, major catalysts for the rise in demand for personal loans include
For example, Fibe’s Instant Cash Loan App provides instant cash loans for every purpose, no questions asked.
With the growing demand for consumer credit, financial institutions are gearing up to provide a more efficient means of lending. There are now more opportunities for lenders to tap into the demand for consumer loans and credit cards.
Fintech-powered solutions are also on the rise as they leverage technology to the fullest. This then facilitates application and approval processes, making them quicker than traditional options that still use time-consuming, legacy processes.
As the fintech sector opens new doors for innovative solutions, the personal lending sector is primed to cater to larger audiences. For one, online personal loan apps are already becoming a popular destination for customers looking to secure quick personal loans or payday loans.
Fuelled largely by millennials and their aspirations, easy personal loans are all set to grow. With a personal loan lender like Fibe, you can apply for a loan within minutes and receive approval in 10 minutes. What’s more, you get the money in your bank account within 8 to 24 hours.
These instant personal cash loans allow you to gain immediate and unfettered access to funds through secure bank transfers. Many justifiably believe that personal loans are the type of loans to serve customers’ needs for immediacy and availability. Now with personal loans online, new customer segments can also be served better. This gives everyone a chance to bridge gaps and achieve goals with ease.
A simple answer to the rise in the demand for loans despite the rising lending rate is the easy accessibility facilitated by the advancements in the fintech sector.
Indians borrow the funds they need from banks, NBFCs, SHGs, other financial institutions and even from their loved ones.
Key reasons for the yearly growth in the demand for personal loan include the following:
The reasons for the rising popularity of personal loans are that they are available online without any security, giving borrowers access to funding in a matter of hours.
