Personal Loans are fast and the easiest way to get Loans, and the other alternatives for fast smaller size loans.
Bloomberg Quint Reported :-
CIBIL Explains The Reasons Behind India’s Soaring Personal Loan Growth –
A weak economy has weighed on growth in credit to most segments. But not on personal loans and amounts outstanding on credit cards. While overall consumer credit growth declined for the sixth straight quarter, “consumption loans” continued to grow, according to the latest credit trends report from credit bureau TransUnion CIBIL. For instance, credit card outstanding grew at 40.7 percent in the third quarter of calendar year 2019 compared with 31.7 percent a year ago. Personal loans grew at 28 percent compared with 33.5 percent in the same period last year. The volume of origination in the personal loan category soared 134 percent year-on-year. Overall, the share of consumption products to total balances originated increased to 31.2 percent in third quarter of 2019 from 25.1 percent in the year-ago period, CIBIL said.
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What is driving this increase in consumption credit? Are lenders pushing such products in the absence of credit growth from other segments like auto and home loans? Or are consumers increasingly funding their consumption via credit in the absence of strong income growth? Harshala Chandorkar, chief operating officer of TransUnion CIBIL, said it was a combination of both these factors. We are seeing good growth in the unsecured loans. I think that it’s linked to a change in the consumer mindset. People are looking at smaller ticket loans. They are financing things like mobile phone purchases through credit and are not really looking at it as a loan but an easy way to access finance.
Consumers looking to fund purchases, such as consumer durables and even holidays, through credit have a variety of options today. Apart from the option to take a regular personal loan, non-bank lenders are offering specialised products. EMI schemes are also offered across credit and debit cards to fund such purchases. There is a shift in the consumer mindset and there is availability of products, said Chandorkar. “Options are available to consumers to get access to finance for these products. It happens seamlessly, in a few minutes,” she said. The shift away from credit taken for one-time large expenses like weddings or medical needs, and towards financing of seemingly regular purchases, is visible in the reduced ticket size of such loans.
Read more at: https://www.bloombergquint.com/business/cibil-explains-the-reasons-behind-indias-soaring-personal-loan-growth
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Financial Express Reported :-
Covid-19 personal loan scheme: Money available at reduced rates
Covid-19 personal loans, as the name suggests, are not business loans but personal loans with some relaxed norms. The biggest relaxation is in the form of a lower rate of interest. Rate of interest is between 7% to 10%, which is lower than normal rate of interest for personal loans which start from 12% and can go up to 20%, depending on the individual’s credit score and income related factors. Banks which are offering such loans are Bank of Maharashtra, Punjab National Bank (PNB), Indian Overseas Bank (IOB), Bank of Baroda (BoB), Indian Bank, Union Bank of India, UCO Bank, State Bank of India (SBI) and Bank of India. Rest of the banks are only providing moratorium of up to three months on personal loan EMI payments that are due between March 1, 2020 to May 31, 2020 as per RBI directive.
So the big question is whether it is available for everybody. The answer is no. These loans are for existing customers of lenders and most of the banks are offering loans to borrowers of home loans. The eligibility criteria is that the borrower needs to have salaried account or personal account with the bank.
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Repayment track record
The idea is that banks are ready to lend but not at the cost of default. They will lend only to those borrowers who have a decent repayment track record and a good credit score. Different banks have different criteria for how much can one borrow. For the self-employed, the limit is usually 50% to 60% of their last filed income. For salaried personnel, it is about 10 times the monthly salary.
Banks have already given a lifeline to existing borrowers at the behest of RBI by offering a three-month EMI moratorium on all outstanding loans falling due between March 1, 2020 to May 31, 2020 including home, educational, personal and car loans. The catch is the interest will still accrue during the moratorium and will be added to the outstanding loan amount. We need to understand that it is not an interest waiver but only deferment. So in a way, the total interest cost of the loan will increase.
Just because Covid-19 personal loans are available at reduced rates does not mean that one should opt for it. Loans still have to be repaid and we don’t know what will happen in the future. We don’t know how long this crisis will continue and we are borrowing right now to fill the gap for something when we don’t know whether we will be able to repay or not. Yes, if the requirement is there, then one should take these loans but only as a last resort. No point adding more debt in uncertain times.
Read more at: https://www.financialexpress.com/money/your-money-planning-to-go-for-covid-19-personal-loan-take-it-only-as-a-last-resort/1964263/
Jassi Guru 