Personal loans are steadily climbing up the ladder again in terms of consumer demand and overall popularity. And they have contributed greatly towards a booming festive shopping scenario in recent months, as per several reports. The spread of easy-to-use loan apps and access to instant credit have naturally fuelled pent-up demand after two years of the pandemic. Customers are now going all out with their festive purchases, as per several reports, and digital lending platforms are witnessing a rise in demand for a loan for shopping with smaller ticket sizes.
Introduction
Many experts have stated how the quarter between October and December has multiple festivals and other special occasions, leading to higher consumption in the retail segment. More customers spend on precious metals, cars, electronics, and different categories. The increase in retail consumption is naturally associated with higher credit demand across the customer base, along with higher competition amongst multiple loan apps and other digital lending platforms to attract customers and grab a higher piece of the pie in this period.
Multiple discounts, special offers, and other incentives from lenders and brands also draw more people towards taking personal loans and additional short-term credit to fulfil their desires. The festive season has already seen incentives like quick and instant discounts, cashback, and pre-approved loan deals. Multiple lending platforms are already rolling out the red carpet for consumers, making it easier for them to access credit.
How are things shaping up so far?
It is not just about conventional personal loans; customers are more inclined towards offerings like BNPL (buy now, pay later) and no-cost EMIs from brands like LazyPay for small purchases. Many lenders are providing credit without any processing fees, while interest rates on gold and personal loans are increasingly getting more attractive in this period. Online e-commerce platforms are also tying up with several digital lenders to draw higher customer volumes. They are also offering special discounts on multiple types of payment along with easier loan integration.
Several leading banks are also offering instant cash discounts of up to 10% for purchases of specific amounts on leading e-commerce portals. Many lenders are also providing no-cost EMIs for customers. Some are giving processing fee refunds or waivers for select customers, while many are offering pre-approved personal loans, which are faster to obtain. With more demand for various products, brands have also stepped up production, leading to more demand for business loans as a natural outcome of the current trends.
Credit demand has increased exponentially throughout MSMEs and top business houses right from the eve of the festive period. MSMEs are also more inclined towards digital loans, and this has been another boost for several fintech players and a shot in the arm for technology-based credit mechanisms. Several lenders are also going all out to integrate more new-age payment methods and applications used by MSMEs for their payments and distribution.
Capital access has become significantly more accessible for both individual customers and MSMEs, with quick disbursals, fast and paperless applications and processing, data-driven loan underwriting, zero human intervention, and a seamless user experience. This is especially seen in personal apps like LazyPay through their XPress Loan offering, which offers users quick cash disbursals with minimum documentation. This is helpful for those looking for swift credit access throughout this festive period, both for transactions and to meet other expenditures. One aspect is undisputed, however- personal loans have now become digitized and are fuelling growing festive shopping volumes across sectors. The trend should continue, according to industry experts, with more customers getting onto the digital bandwagon. Of course, a retail shopping boom equates to a more positive industry outlook and higher job creation prospects.
When should you take a Festive Season Personal Loan?
A personal loan to cover your festive expenses can be a prudent choice when planning. This financial tool proves especially beneficial for substantial purchases like appliances, jewellery, or other items that exceed your regular income. Even minor home improvements can be financed using such loans, with the added benefit of lower interest rates and processing fees during the festive season, making them a viable option.
However, there are two crucial points to bear in mind:
Loans outlast the festivities – Unlike Diwali sweets, a loan for shopping cannot be passed on to others. Once you take out a loan, you’ll be obligated to pay EMIs, and personal loans are notably more expensive. The EMI payments will augment your monthly expenses, so it’s imperative to plan accordingly to avoid falling into an unending cycle of debt.
Not everything that shines is gold – It’s easy to be enticed by a seemingly ‘fantastic’ personal loan offer without considering alternatives in the market. It’s essential to watch for festive season deals from other banks and compare them with the one you’re currently interested in. Don’t just compare deals and discounts; factor in the overall cost of the festive loan. For instance, while a 100% processing fee waiver might seem enticing, it may not be as advantageous as a 1-2% reduction in the interest rate.
Taking a personal loan during the festive season
Many consumers seek personal loans to address various needs during this festive period. Some of the prominent reasons for opting for personal loans during the festive season encompass:
- Travelling to their homes: Many individuals use personal loans to cover travel expenses as they journey back to their hometowns to celebrate with family and friends.
- Family weddings: Festive seasons often coincide with family wedding related expenses, and personal loans can assist in financing these significant and joyous events.
- New vehicles: Some individuals choose to purchase a two-wheeler or secondhand cars during festive seasons, and personal loans can provide the necessary financial support.
- Consumer durables: Upgrading household appliances and electronics is a common practice during this time, and personal loans can make these purchases more accessible.
- House upgrades: Homeowners may use personal loans to undertake renovations or improve their residences to enhance the festive atmosphere. \
- Home improvement: General repairs, redecoration, or enhancing the overall comfort of one’s home are also reasons for taking personal loans.
- Shopping for gadgets: The desire to acquire the latest gadgets and technology often leads individuals to seek personal loans during festive periods.
- Gifting: Generous gift-giving is a hallmark of the festive season, and personal loans can assist in purchasing thoughtful presents for loved ones.
- Vacation: Planning a vacation or holiday getaway is another reason individuals turn to personal loans, enabling them to celebrate the season especially.
Given the substantial increase in demand for personal or festive loans during the festive season, consumers should carefully consider the following factors when selecting their preferred lender to fulfil their instant fund requirements.
To Conclude
Verifying the credibility of the apps and securing a personal loan for shopping exclusively from RBI-regulated entities is essential to ensure smooth and hassle-free processes.
With the escalating demand, companies like LazyPay offer a range of advantages to their customers, including instant access to funds up to Rs. 5 lakhs, competitive interest rates, flexible repayment period ranging from 3 to 24 months, rapid approvals, and a fully digital, swift application process.
So, remember, when it comes to personal loans during the festive season, the right choice can turn your dreams into reality and your celebrations into cherished memories!
Frequently Asked Questions
- What is the maximum amount of a personal loan?
The maximum amount of a personal loan can go up to Rs. 5 lakhs, as offered by platforms like LazyPay.
- What are the three advantages of a loan?
Three advantages of a personal loan during the festive season include competitive interest rates, flexible repayment periods (3 to 24 months), and rapid approvals, making it a convenient financial tool.
- Which loan is easy to get?
Loans like personal loans, especially during festive seasons, are relatively easy to obtain due to quick approvals and minimal documentation requirements.
- How do you calculate loan interest?
To calculate loan interest, use the formula: Interest = Principal Amount × Interest Rate × Time (tenure in years). Many online calculators are available for accurate calculations.
- Which is the cheapest personal loan?
When seeking the cheapest personal loan, it’s essential to compare interest rates, processing fees, and other costs. LazyPay’s low-interest rates make it a compelling option for cost-conscious borrowers during the festive season.