How Personal Loans Are Changing Financial Dynamics?
Financial inclusion has been gaining a lot of momentum lately. During the initial stages of lockdown, the chaos in the market led to a financial crunch for both individuals and businesses. It led to job loss for some while loss on business for others, but the expenses remained the same. There was a need to curate a financial instrument that can be easily accessed during a crisis like Covid for urgent expenses like house repairs, weddings, business expansions, travel, or medical expenses while letting one maintain their liquidity.
India has a varying financial dynamic, NBFCs and FinTech firms have fabricated personal loans which can be availed easily. The eligibility criteria for availing credit from digital lending players is either to have minimum monthly income or earnings, which makes it suitable for both self-employed, and any employee.
With the rapid growth of smartphone users, these players have been bridging the credit gap by providing access to credit online and at the tap of one click. Individuals from even the smallest cities can avail themselves of credit if they qualify the eligibility criteria and can access the internet. Personal loans are an ideal financial instrument for unforeseen expenses but also act as a financial shield, especially for the self-employed. Digital lending firms have renovated personal loans so that it caters to financial requirements without diluting the liquidity of an individual. The repayment plans can be customized as per everyone’s earnings bracket.
The above-mentioned features advocate how personal loans can assist an individual during a financial crunch. The following pointers will guide you on how to avail of a personal loan and its added benefits:
How can an individual avail of a personal loan?
Digital lending firms aimed at disbursing loans in a quicker and efficient manner, hence they lend on mobile applications or web pages. All that one needs to do is create an account on any of the digital lending platforms and check the credit limit availability basis their eligibility criteria.
What is the maximum limit one can avail a personal loan for?
The credit limit may vary from one platform to another and can go up to 35-50 lakhs. The credit limit has been structured such that it will cover up all the major expenses like wedding, travel, medical, household, etc. The huge limit allows individuals to be financially empowered as the expenses will not disturb the liquid assets.
Will it take days for the credit amount to reflect in your account?
Digital lending firms have digitalized their processes with an aim of providing credit at the earliest. Mostly it takes a day for the amount to be reflected in the bank account, this allows an individual to tend to its urgent expenses without touching their earnings.
Do you need multiple documents for availing of credit?
Digital lending players lend credit with an aim of providing complete financial independence and hence only ask for the most basic of the documents. KYC documents, business/income proof, and in some cases a year’s ITR is all an individual may need to avail credit. Since these loans are collateral-free, it allows even the owners of small enterprises to also avail loans for business expansion or any other urgent expenses.
Digital lending firms are changing the financial dynamics considering the credit gap that existed for many individuals. Their aim is to provide financial inclusion and empower individuals financially. Maintaining liquidity is a priority because of the volatile nature of the market, one should not spend all its liquid assets.
‘Spend only what you earn’ is what our elders have always taught us and did not see ‘credit’ or ‘loan’ in good light, but with the changing individual behavior and financial dynamics, availing a personal loan for emergencies is preferred rather than a zero-bank balance. So, the next time you have an unforeseen expenditure, will you be reaching out to your cash or credit?
