Do you have an upcoming wedding in the family? Are you worried about the financial arrangements for the wedding? If the answer is yes, you might consider taking a personal loan. This type of unsecured loan does not require any collateral and is easy to obtain. You can arrange finances in the quickest way possible for several personal expenses like weddings, studying abroad, home renovation, dream vacations, and so on. The best personal loan consists of lower interest rates, minimal documentation, flexible tenure, quick disbursement, no collateral, no processing fees, and a higher loan amount. Do checkout the best personal loan offers page to get to a better decision.
Reasons to apply for a personal loan may vary from one person to another. The same saying goes for the loan schemes as well. The interest rates, EMI amount, and the tenure vary from one financial institution to the other. The flexibility of personal loans makes them popular. According to the latest reports, the net interest income from personal loans has been steady, even though there was a drop in the number of personal loans last year when the pandemic hit, the reasons being unemployment and salary cuts. Now, the trend is changing gradually, and numbers are going up again. Let us check out the direction of personal loans as per the new financial year 2021.
Personal loans are accessible digitally.
Taking loans has become easier and faster thanks to digital platforms now. Most of the banks have made their services and products available online. So, people get access to the specifications, terms, and conditions, and the loan’s intricacies conveniently from the comfort of their homes.
Personal loan moratorium
It has become more accessible for the borrower to seek an EMI moratorium to get an authorized delay period for the repayment. After seeking the moratorium, no late payment fee will be deducted from the borrower’s account. The interest amount that has been assembled in the moratorium period will be distributed in the future EMIs. In addition to that, this delayed payment will not impact the credit score. So, you have the option to opt for a moratorium if you are facing a cash crunch because of the pandemic.
Hardcore competition in the lending market
The number of financial institutions that offer personal loans is increasing. As a consequence, there is hardcore competition going on in the lending market. If the banks want to increase their sales, they need to stick to the only necessary parameters for evaluating the borrower’s loan eligibility. As of the financial year of 2021, there is an 87% share in active personal loans, and the outstanding portfolio value stands at 38%. The average ticket size has come down by more than 40%, so disbursement of personal loans in terms of year on year is down to 71%.
Flexibility in repayment
Thanks to digitization, now repayment of the personal loan amount has become flexible. For personal loan repayment, you can choose long-term or short-term compensation. The Standing Instructions, net banking, and Electronic Clearing Services have made the payment more accessible and faster.
Compelling interest rates
Since the competition is top-notch, the banks and NBFCs now charge reasonable interest rates for personal loans. It is possible to calculate and compare the various interest rates before making the final call. So, you can avail the benefits of the best personal loan as per your requirements.
The intelligent credit score system
It has now become effortless to get an idea of the financial credibility of a consumer. Credit rating agencies like the Credit Information Bureau Limited provide authentic credit scores based on your previous financial position and repayment record. If a consumer has a good credit score, he has a better chance to get loan approval. This has made lending and borrowing loans seamless.
Increased flexibility in EMIs
According to the latest trends, the payment amount of EMIs, whether it will be increased or decreased, is decided based on the financial situation of the borrower, which is quite flexible.
People now have become more aware of their finances and investments. They are more open about their expenses. Thus they have a more concrete idea of where they need funding. So, they are opting for multi-purpose loans.
Taking a personal loan is highly suitable if you have a financial emergency. It is crucial to evaluate your requirements and compare the available options properly before applying for any loans. Otherwise, the liability burden can interfere with your credit score and disrupt your finances. Referring to the current trends in personal loans, it seems like if you have a steady income, then opting for one will be a smart move since repayment of EMIs will be easy. But, if you worry about non-payment of EMIs to save funds, along with interest, you will be charged a late fee. You can consider taking a personal loan moratorium or a completely new personal loan scheme in this scenario.