It’s no secret that instant Personal Loans are a top choice for borrowers. Over the years, you must have been flooded with various choices of instant Personal Loans featuring low-interest rates, flexible credit alternatives, and a rapid and hassle-free approval procedure that doesn’t require any paperwork. These attractive elements, combined with the convenience of applying for an instant Personal Loan online, state why these loans are getting so popular amongst everyone.
However, these features have always been available with instant Personal Loans. So, why is there a spike in loan applications now?
According to data provided by the Reserve Bank of India, credit growth to the industry has grown by 5.5% in the past year, with Personal Loans growing by about 12.3% in February of 2022, up from 9.6% the previous year. This data proves that the demand has increased and will likely continue.
To understand how this growth has taken place, let us explore the factors contributing to instant Personal Loans’ rising popularity.
Consolidation of Debts
A Personal Loan can assist you by combining all of your bills and boosting your credit history. Furthermore, Personal Loans have cheaper interest rates than other loans. As a result, you may use this as an option to pay off all your high-interest debts. Debt consolidation is a significant element leading to the popularity of instant Personal Loans online. To pay off just one loan EMI rather than tracking and repaying numerous, many debtors utilise Personal Loans to pay off credit card debt and foreclose on other loans. As a result, using Personal Loans to consolidate your debt might be quite beneficial.
With increased cash flow unpredictability, Personal Loan repayment has become a significant concern. Instant Personal Loans offer flexible repayment terms of up to 5 years, allowing you to pay off your debt at a suitable pace. NBFCs also provide instant loans with shorter payback tenures ranging from 3 to 12 months, allowing you to select the loan that meets your requirements and repaying capacity. With simple repayment methods like ECS (Electronic Clearing Service), PDC (Post Dated Check), and so on, as well as prepayment and partial payment alternatives, instant Personal Loans have become popular.
The eligibility requirements for loans are notoriously difficult to satisfy. Lenders have always demanded a perfect credit history and an outstanding credit score. Borrowers like you believed they could only apply for Personal Loans with a CIBIL score that was extraordinarily high or risk getting rejected. A CIBIL score ranges from 300-900. Most conventional lenders consider a score of 750 or above desirable, meaning a Personal Loan with a CIBIL score of over 750 is more likely to be approved.
However, given the present economic conditions, new-age lenders like Poonawalla Fincorp will approve you with less-than-perfect credit for loans, as long as you have the required documents and fit within the lender’s minimal income range. Because of the simplified qualifying requirements, many people are now applying for instant Personal Loans with higher possibilities of approval.
Speed and Accessibility
Typically, loan applications entailed standing in endless lines with piles of paperwork and waiting days for approval. When you apply for instant Personal Loans online, you eliminate the hassle of physically going to the lender’s office with weighty files full of documents, adding to its convenience and accessibility. The ability to apply for loans at any time from any place has significantly increased its popularity. Additionally, instant Personal Loans do not demand collateral, resulting in quicker loan approval. Although collateral-free loans and online loan applications are not new concepts, their value in the present day has grown exponentially.
Instant Personal Loans are the best option in times of need because they require minimal documentation, have a straightforward digital approval procedure, and have reduced eligibility requirements. With the ever-increasing necessity for quick funding in a time of financial insecurity, the popularity of instant Personal Loans has surged.