Personal loans are gaining popularity. This is likely due to the growing gap between incomes and expenses and raising aspirations. For 2022, the Indian Personal Loan Market will be driven by job losses and pay cuts due to the corona epidemic. Personal loans are easy to access and have many great features. The private loan market has seen positive changes due to digitization and recent decreases in borrowing costs.

The latest updates and RBI report show that personal loans now account for 24% of total bank credit, up from 16.6% in 2016.

However, the number of loans to the industrial sector has declined from 41.2% in March 2020 to 30.6% in February 2020. Over the past five years, personal loans continued to grow at an impressive pace.

These are some highlights that indicate personal loan growth:

• According to the RBI report, personal loans account for 28% of total bank credits as of 2020.
• In the last few years, unsecured lending has seen a significant increase in popularity, particularly among young people.
• Consumer durable loans and personal loans are both growing at the same rate. Fintech lenders that offer loans through partnerships with banks or existing NBFCs are one reason for this increase. This makes it possible for customers to obtain an unsecured/personal loan at a reasonable price without visiting banks.
• Female borrowers held 34.2 per cent of the total loan accounts in March 2020, compared to 21.1% in the previous five years.
• In 2019-20, the number of loan accounts at banks increased by 17.3%, clearly indicating increased bank lending over the past year.
• Personal loans increased by 28%, compared to 33.5% during the same time last year.
• The average ticket size for personal loans provided by NBFCs has dropped with increasing numbers.
• 37% of personal loan accounts increased by 28% in 2020 were those customers who borrowed personal loans due to medical emergencies.
• Banks offer a moratorium period that helps personal loan borrowers maintain liquidity when they have loans.
• Some consumers may find it challenging to repay the loan they have taken out after the moratorium expiration.

Interest Rate and its Impact on Personal Loan

The cost of borrowing is determined by the interest rate at which a personal loan is approved. The monthly outgo for EMI will be lower if the interest rate is lower.

This makes it crucial to select a loan with lower interest rates. The personal loan interest rate has been reduced in light of the pandemic, making it more attractive for borrowers to choose this loan. This could also explain the increase in personal loan borrowers. To get a personal loan with the lowest interest rates, you must compare rates and find the right lender.

The key to hassle-free borrowing lies in choosing the lender with the lowest interest rate on your loan.

This was all about statistics on personal loan growth. The corona pandemic, which has seen millions of people lose their jobs and experience unprecedented unemployment, has shaken the economy. Personal loans are a great help for people in need of financial assistance or going through a difficult economic time.