Gen Z is Taking More Personal Loans: Here's Why

 A 2020 report by credit bureau CRIF High Mark said that millennials and young borrowers have been driving the personal loan demand in India. This segment is mainly in the 18-30, whose share has reached 41% in 2022 from 27% in 2020. There are plenty of good reasons why Gen Z is most likely to opt for short-term loans. 


It helps with diverse needs like utility bills, house rent, college fees, debt consolidation and home repair. The lender does not monitor the end usage of the funds. You may borrow any amount between ₹15,000 and ₹4,00,000 and repay at a future date via affordable EMIs. Look at why else Gen Z get loans online for personal needs. 


Fewer Complexities 

A good fintech company strives to make the loan process simple. It is helpful for young adults who may be confused in complicated financial situations. You can download the app from the App Store or Google Play Store, learn about the eligibility and get started immediately. The fees and charges are transparent. The tenure details are updated. FAQs make it easy to solve fundamental doubts for first-time borrowers. You can check them on the website and plan the entire loan before applying. 


Fully Digitised 

The personal loan is 100% online, which cuts the need for human interaction. You do not have to visit the institution or talk to executives. Get the loan app on your device, or head to the official website to start. There is no hefty paperwork as well. Check the documents that need to be uploaded on the portal. The entire process, from application to disbursal, can be completed with a few clicks, which resonates well with Gen Z. 


Simple Eligibility 

You have to be at least 18 years old, a resident of India and a salaried employee of a registered company. The net monthly income required is only ₹15,000. These are usually doable criteria and can be easily ticked off by young adults. So, there is strong financial inclusion, which is otherwise not possible for conventional banks. This helps underserved individuals to borrow funds for multiple purposes without hassle. 


Unique Credit Decisions

Top digital lending companies like CASHe use an SLQ or Social Loan Quotient to determine the creditworthiness of the urban working crowd. This takes several non-traditional data into account to arrive at a score between 0 to 995. It includes smartphone metadata, social media footprint, monthly salary, career experience, KYC details along with the credit score. Gen Z has these factors well-sorted, which helps them qualify for a personal loan without hiccups. 


Conclusion

A personal loan is safe, simple and reliable. Before you get loans online, try to ensure a good credit score. This is critical since it is unsecured. Further, do read the terms and conditions well to avoid surprises later.




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