Fuelled by the growing options and enabled by the rising internet connectivity across the country, Indians are now increasingly borrowing money online. Gone are the days when consumers called their friends and relatives for money. In the digital age, many are borrowing from personal loan apps and moving towards increased consumerism.
If you are living frugally despite pinching pennies throughout the month or are stuck in an emergency, then a salary advance or a personal loan can help. Whether it is a loan to buy furnishings for your house, a new gaming console, gadget or a long-awaited trip, a personal loan can be used for various purposes. As many Indians are borrowing from instant personal loan apps.
In this blog, let’s explore more about the catalyst of this growth.
Recent Trends
The change in buying and saving behaviour and the digital shift is the reason for the recent increase in online borrowing. At the macro level, the Indian economy is moving from high savings, low leverage to low savings and high leverage. Young Indians are saving less and borrowing more, hence, moving away from the traditional aversion to debt.
This trend is partially because of the generational shift in attitudes that has integrated with digital disruption and fintech. The ease in borrowing and competitive interest rates, eKYC and online shopping has allowed lenders to bring more people into the ambit of formal credit.
An individual in need of money is more likely to check an app store and a search engine for a loan today instead of walking to a bank and filling up a physical form. The growing raft of fintech firms providing an array of services in accessing credit and flexible options is also contributing towards the rise in personal loan apps.
Moreover, young Indians prefer brands with greater accessibility and transparency which apps like the CashE, EarlySalary provide.
Fintech companies are increasingly using AI and machine learning to estimate customer’s credit information, creditworthiness, their intent and future behaviour. Smaller loan amounts and shorter credit cycles have helped in understanding behavioural patterns within a shorter time frame.
This has reduced delinquency and improved their ability to assess credit risk in less time. Lending costs have reduced with physical visits required for verification and lower computation costs.
The Enablers
With credit being widely available, winners are the ones who provide instant personal loans with minimum documentation. The trio of digital lenders, shopping websites and businesses, put together in personal loan apps, offer attractive credit schemes. They stoke consumer demand at almost every point of purchase, whether it is online or brick-and-mortar.
Flexible repayment options and collateral-free personal loans have made the trade-off between consumption today and tomorrow’s income feel more rational. Just as retailers break down large payments into easier and hassle-free EMIs, personal loan apps provide easy credit at low rates. Instant personal loan apps typically offer salary advances of 3-to-12 months.
These loans can be meant for everything ranging from shopping, birthday parties to large-ticket items, sometimes up to Rs 2 lakhs. Like personal loans from banks, these are unsecured loans that are digitally processed through an app. The approved amount is directly transferred to your bank account, typically within 8 to 24 hours post your loan request. Just download the app, upload your last 3 months salary slip, identity and address proof and that’s often the gist of it.
If your financial reserves are fraying or a financial emergency has struck, consider our personal loan app. The interest rate charged can be as low as just Rs 9/ day.
