Personal Loan Demand Largely Being Driven By Millennials, Young Borrowers

Personal loans are an ideal choice for borrowers who require financial backing, whether it is to consolidate debts, pay bills, cover medical expenses, or meet other financial requirements. A personal loan, being an unsecured form of credit, does not require you to pledge any collateral as security. But before taking a personal loan, you must ensure that you qualify for it. Numerous factors like age, income, work experience, credit score, etc., are considered by the lenders when granting a loan. Moreover, many banks and lending institutions offer added benefits and lowest interest rates on personal loan if you have an excellent credit score. Therefore, it has become a popular form of credit among millennials and young borrowers that fall in the age group of 18 to 30 years.

According to a report by the credit bureau CRIF High Mark, personal loans have seen some of the most dramatic changes in terms of the product design and customer segment.

• Borrowers below 35 years of age have been the most active in taking out small ticket personal loans with an increase of 12 per cent in volume share
• Borrowers above 36 years of age with greater financial stability were able to afford other forms of secured loans such as home loans, vehicle loans, etc., rather than availing a personal loan.
• In FY 2020-21, the disruptions due to the pandemic led to an increase in the share of matured borrowers, while there has been a drop in the volume of younger borrowers taking out personal loans. On the contrary, borrowers above 35 years have been actively borrowing personal loans.

Reasons to Apply For a Personal Loan

• Cover travel expenses
• Finance festive celebrations or needs
• Cover wedding expenses
• Build/renovate a house
• Medical and healthcare costs
• Refinancing home loan
• Car maintenance
• Financing higher education
• Funds for business expansion
• Consolidate debts

Personal Loan Eligibility Criteria

• The applicant must be an Indian citizen to avail a loan.
• The borrower needs to be between the ages of 23 to 55 years to qualify.
• Eligible applicant should be employed with a private, public, or multinational company (MNC).
• The applicant’s monthly income should be between Rs. 15,000- Rs. 35,000.

Documents Required For a Personal Loan

Some of the basic documents required for Personal Loan are as follows:

• Age proof (Birth certificate, Passport, Aadhaar, PAN Card, Voter’s ID, etc.)
• Address proof (Aadhaar card, Passport, Electricity Bill, etc.)
• Bank Account Statements
• Latest Income Tax Returns (ITR) and Form 16
• Credit Report

Personal Loan Calculator

An EMI, or equated monthly instalment, is the amount payable to the lender each month to repay the principal loan amount and the accumulated interest. Calculating EMI using the personal loan EMI calculator is easy, and you get to know the payable EMI amount in seconds. Below is a personal loan calculator formula used by the personal loan EMI calculator.

Formula: EMI = [P x (R/100) x {1+(R/100)}^N]/[{1+(R/100)}^(N-1)]

Where,

EMI = Equated monthly instalments

P = Loan principal i.e. amount borrowed

R = Loan interest rate

N = Loan tenure in months

The above formula works for calculating personal loan EMIs. With the availability of an online EMI personal loan calculator, the result can be obtained instantly. The borrower must fill in the variables of the loan, such as the principal amount, tenure, and interest rate, to get the final result.

In the financial marketplace, some banks and NBFCs offer loans at affordable rates. To get the best rates, you need to research the market and opt for a lender that can fit your requirements. Moreover, as mentioned earlier, having a credit score above 750 will make this even easier.

At Finserv MARKETS, you can avail a Bajaj Finserv Personal Loan at attractive rates, where you can get a high loan amount of up to Rs. 25 lakh. Salaried as well as self-employed individuals are eligible for the loan. You can also avail a personal loan for unemployed individuals under special terms and conditions. The borrower can choose their repayment tenure, which usually ranges from 1 to 5 years.

With the Finserv MARKETS app, the online application process is quick, and the funds get disbursed within 24 hours post loan approval. Interest charged on personal loans starts as low as 12% per annum. The benefit of no end-usage restriction on the amount makes personal loans an ideal choice for all your financial needs.