As more customers resort to online lending platforms, the market for personal loans has grown significantly. Today you can avail a salary loan or an online loan with ease. There are multiple money loan apps that offer you instant loans without security.
Many traditional lenders also offer online loans through their website or mobile banking app. The increased ease of availing finance, simplified documentation requirements and minimal eligibility rules, have contributed to the popularity and growth of these personal loans.
Read on to understand the growth and market for an online personal loan.
What Is An Online Personal Loan Market?
The online personal loan market refers to the online platforms or websites that offer quick loan through digital processing. It involves financial organisations or lending firms that provide unsecured personal loans digitally. The entire process from enquiry to submission of loan application and documents to disbursal of funds is done through an app or website. There is no involvement of any third party or loan agent, which makes the process more transparent, quick and easy.
The simplicity, quickness, and accessibility of the online personal loan market have helped it grow in popularity in recent years. If you are a salaried person, then you can apply for a salary loan through these digital platforms. Salary loans are short-term loans best suited for urgent needs.
Applying for an online loan is simple, and you can avail the finance within one or two business days. Additionally, there are no prepayment penalties, flexible repayment alternatives, and competitive interest rates on the market. Overall, the online loan market has transformed how consumers obtain credit and have grown to be a major participant in the lending sector.
What are the reasons behind the growth of the online personal loan market?
Here are a few reasons for the expansion of the online personal loan market:
- Convenience
Convenience is a major factor in the expansion of the market for online loans. Online loans are accessible around-the-clock and can be applied for from the convenience of your home, which streamlines and streamlines the procedure.
- Lower Interest Rates
Online loan providers offer more appealing interest rates because of their lower operational costs. Compare different lenders to find the best interest rates in the market.
- Speedy Disbursement
Since the entire procedure is automated and doesn’t require much paperwork, online personal loans are renowned for their quick disbursal of cash. Most money loan apps disburse the loan amounts within 24 to 48 hours.
- Different Loan Options
Online personal loan providers make it simple for you to select the loan that best meets your needs by providing a variety of lending alternatives, including personal loans, payday loans, and lines of credit.
- Flexible Credit Score Policies
It is simpler for applicants with lower credit scores to obtain a loan. Many fintech companies uses data and psychometrics to analyses the risk associated with your credit profile.
- No security
Collateral is often not required by online personal loan providers, making it simpler for borrowers to get loans without putting their assets at risk.
Statistics on the Growth of the Online Personal Loan Market in India
Over the past several years, India’s online personal loan sector has experienced substantial growth. A select group of significant participants, including banks, non-banking financial institutions (NBFIs), and fintech firms, presently control the majority of the industry. These players provide a selection of small-ticket, secured, and unsecured personal lending products.
According to information supplied by the Reserve Bank of India (RBI), the total amount of personal loans still outstanding in the nation as of June 2021 was ₹22.98 lakh crore. Unsecured personal loans out of this totaled ₹6.22 lakh crore.
There are several reasons for the expansion of the online personal loan sector. The growing use of smartphones and the web in India is one of the main factors. Due to this, borrowers may now apply for loans online, which accelerates, facilitates, and expands access to the procedure.
Nevertheless, it is anticipated that the Indian market for online personal loans would keep expanding due to shifting customer tastes and technical developments and will also give a boost to other loans like salary loans and other quick loans.
Conclusion
The lending sector has transformed thanks to personal loans, salary loan, and other rapid loans. Several digital lending platforms are competing for market share in the fiercely competitive online personal loan sector.
Overall, it is anticipated that the market for online personal loans will expand in the years to come as more and more customers resort to online lending platforms for their credit needs. But with the growing market of online loan, there are chances of digital fraud as well. To prevent falling prey to fraud or predatory loan tactics, you should carefully weigh their alternatives and pick a reputable and trustworthy lender.
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