Personal loans are becoming increasingly popular in India. The rise in its popularity among the working population is for several reasons. The primary reason is the ease of availing online modes and subsequent quick sanctions.
Professionals have hectic lives and often face immediate funding needs. The working class may need funds to cater to upskilling, acquiring better education to match professional requirements, medical emergencies, and maybe immediate home renovations. They often resort to a quick personal loan, an easy way to absolve financial crises.
Let us look into a few more reasons why the working population takes personal loans.
Attractive Interest Rates
With limited salaries in hand, and an array of ends to meet, acquiring a personal loan at an affordable interest rate becomes a lucrative option for the working class. NBFCs that understand this need offer various interest rate schemes for professionals, making it a go-to proposition for them to fund immediate financial situations.
Offers Online and Offline Services
While the world is becoming digitized by the second, it is still important to accommodate those who do not have the resources to carry out all activities online.
The lack of uniformity in device access is precisely why personal loans are so popular in India – it caters to those who prefer the online mode and those who would like to go the traditional route. Personal loans can easily be availed through loan apps that are highly convenient to navigate.
You have to submit soft copies of all the required documents to get the best online personal loan rates. As far as app-based lenders are concerned, digital verification is an integral part of availing a personal loan online. For those who would prefer other forms, the following are different types of verifications you need to complete the process:
- Online KYC – This constitutes verification of your Aadhar card, eKYC, as well as Video KYC.
- Phone Verification helps ensure that each profile created or application submitted is through a legitimate account. It is conducted via phone call and provides verbal verifications of the details furnished by the borrower.
Whether you prefer the online route or the traditional route, personal loans are convenient if you have your documents ready, making them popular among the Indian working class.
Reasons why a majority of the working population in India opts for personal loans:
Easy Eligibility
The primary factor in making personal loans accessible is their ease of meeting eligibility criteria. Lenders and financial institutions take your repayment capacity and creditworthiness into account. To determine these two factors, the following aspects are checked:
- Credit Score
- Profession
- Income
- Professional experience
- Age
- Employment Type
- Credit History
- Debt to Income Ratio
These factors come together to indicate the lender of your eligibility as a personal loan applicant. To make things even simpler, most online personal loan lenders offer a tool called an EMI calculator. The tool helps you gauge your tentative interest rate and the loan amount eligible after entering the required information. Using the tool, busy working professionals can quickly understand loan requirements and sanction possibilities.
Minimal Documentation
The instant and speedy nature of personal loans stem from very minimal document requirements. While several financial institutions and lenders are in the market, the documentation process remains standard throughout, with some exceptions depending on the lender’s needs. The following are documents you need to submit:
- Bank statements, income tax return documents, etc. for income proof
- PAN Card, Aadhar Card, Driver’s License, Passport, etc. for identity and address proof
- Salary slips or employer ID cards for proof of employment
The documents are basic, and professionals usually have these ready, making it easy to complete the personal loan application process and get rapid loan sanctions.
Competitive Interest Rates
When undertaking any form of debt, the borrower must ensure it is affordable. Another factor that makes quick personal loans so enticing for the working class is their competitive interest rates. To get the best interest rate, you must have a stellar credit score, ideally above 750. A good credit score can help you acquire a loan at a 10% to 11% interest rate. Since loans are a risk-based matter for lenders, in addition to a good cibil score, you must also have a steady income and credit history to prove your repayment capacity.
Conclusion
With the ease of online loan tools and eligibility criteria becoming increasingly manageable, quick personal loans are a go-to avenue for the working population. Get started with your loan with a lender that offers your optimal benefits!
