India Personal Loan Market is Fueled by Non-Banking Financial Company (NBFC) Segment During the Forecast Period
India
personal loan market is anticipated to grow due to the growing awareness &
financial inclusion, flexibility & customization, and consolidation of
debts.
According to
TechSci Research report, “India Personal Loan Market”- By Region,
Competition, Forecast and Opportunities, 2029”. A personal loan is a
type of unsecured loan provided by banks, non-banking financial companies
(NBFCs), and other lending institutions to individuals for personal use. Unlike
loans like home loans or car loans, personal loans do not require any collateral
or security. They are granted based on the borrower's creditworthiness, income,
and repayment capacity. Personal loans typically come with fixed repayment
terms, which means borrowers know the exact amount they need to repay each
month. This allows for better financial planning and budgeting.
Personal loans
can be used for consolidating multiple debts into a single loan. This can
simplify finances by combining various high-interest debts into one loan with a
potentially lower interest rate. It helps in managing debts effectively and
reduces the burden of multiple payments.
The personal
loan market in India has witnessed steady growth, driven by the increasing
demand for credit and the willingness of individuals to avail themselves of
loans to fulfilling their aspirations and goals. However, it is important for
borrowers to exercise prudence and financial discipline while availing personal
loans, as excessive borrowing or defaults can have a negative impact on their
creditworthiness and overall financial well-being.
The personal
loan market in India has experienced remarkable growth, driven by digital
advancements, regulatory reforms, and intense competition. The market offers a
wide array of options for borrowers, providing them with quick and accessible
financing solutions. As the Indian economy continues to expand and the
financial landscape evolves, the personal loan market is expected to witness
further innovation and development, catering to the evolving needs of
consumers.
The personal
loan market in India offers numerous opportunities for lenders to tap into the
growing demand for credit. By embracing technology, targeting underserved
segments, expanding into untapped regions, and providing personalized loan
solutions, lenders can capitalize on these opportunities and establish a strong
foothold in the market. Similarly, borrowers can benefit from a wide range of
loan options, quick approvals, and competitive interest rates offered by
lenders, fulfilling their diverse personal financial needs.
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market data Figures spread through XX Pages and an in-depth TOC on the "India Personal Loan Market.”
The India
personal loan market is segmented into provider, tenure, interest rate, and
region.
Based on the
provider, the market is segmented into bank and non-banking financial company
(NBFC). Among these, the non-banking financial company (NBFC) is the
fastest-growing segment in the market during the forecast period. NBFCs often
cater to underserved segments of the population, including individuals with low
credit scores or those who may not meet the stringent eligibility criteria of
traditional banks. This has made personal loans more accessible to a broader
customer base. NBFCs often offer more flexible terms and conditions compared to
traditional banks. They may be more lenient regarding income requirements,
employment history, and credit scores, making it easier for individuals to
qualify for personal loans.
Based on
tenure, the market is segmented into less than 12 months, 12-36 months, and
more than 36 months. Among these, the more than 36 months tenure has a
significant share in the market during the forecast period. Longer loan tenures
result in lower monthly installment payments, making personal loans more
affordable for borrowers. By spreading the repayment over a longer period, borrowers
can manage their monthly cash flows more effectively and comfortably
accommodate the loan EMIs within their budgets. This affordability factor
drives the demand for personal loans with extended tenures. Also, extended
tenures provide borrowers with greater flexibility in loan repayment. They can
choose a tenure that aligns with their financial goals and repayment
capabilities. Borrowers can also opt for prepayment or foreclosure of the loan
if their financial situation improves, without incurring hefty penalties.
Major
operating companies operating in the India personal loan market are:
- IDFC FIRST Bank
Limited
- HDFC Bank
Limited
- ICICI Bank
Limited
- Axis Bank
Limited
- Kotak Mahindra
Bank Limited
- Navi
Technologies Limited
- Lendingkart
Finance Limited
- Whizdm Innovations
Private Limited (Moneyview)
- One97
Communications Limited (Paytm)
- Bajaj Finserv
Ltd
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“The personal
loan market in India is witnessing robust growth, driven by the rising
aspirations and financial needs of individuals. With the availability of easy
credit, competitive interest rates, and digital advancements, the market offers
convenience and flexibility to borrowers. However, borrowers should exercise
prudence and financial discipline while availing of personal loans to ensure
responsible and sustainable borrowing practices. The increasing demand for
personal loans in India can be attributed to various factors such as rising
medical expenses, education costs, travel aspirations, home renovations, and
debt consolidation needs.” said Mr. Karan Chechi, Research Director with
TechSci Research, a research-based global management consulting firm.
India
Personal Loan Market By Provider (Bank, Non-Banking Financial Company
(NBFC)), By Tenure (Less than 12 Months, 12-36 Months, More Than 36 Months), By
Interest Rate (10%-15%; 16%-20%; Above 20%), By Region, Competition,
Forecast and Opportunities, 2029, has evaluated the future growth potential of India personal
loan market and provides statistics & information on market size,
structure, and future market growth. The report intends to provide cutting-edge
market intelligence and help decision-makers take sound investment decisions.
Besides, the report also identifies and analyzes the emerging trends along with
essential drivers, challenges, and opportunities in the India personal loan
market.
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