Why Personal Loans Are A Smart Choice For Mumbai Millennial?

Mumbai is an Indian city which attracts many people to settle in it from different parts of the country in order to fulfil their dreams. Its income also contributes majorly in the country’s GDP. Millennial in the age group of 18 to 30 years have changing lifestyles and spending habits like buying expensive gadgets and extensive travel plans. Unlike their previous generation who used to take personal loans to buy a house or fund a wedding, the millennial avail a personal loan to fund their personal interests. This has led to a significant increase of their share in the personal loan market in the last few years.

What Is A Personal Loan?

Personal loan is an instrument which a borrower uses to fund his unplanned financial needs. It is an unsecured loan and is disbursed easily and quickly. It may have a high rate of interest depending on your credit score. It is a good idea to have a high credit score when applying for a personal loan.

Why A Personal Loan Is A Smart Choice For Mumbai Millennial?

Most lending institutions like banks and NBFCs are providing personal loans to Mumbai millennial to help them cover their planned and unplanned expenses. Following are some of the reasons why there is a high demand of personal loans in Mumbai.

• No Collateral Required –

Personal loans are non-collateral loans. This implies that the borrower does not need to mortgage an asset to secure the loan. Personal loans are easily available to borrowers with a good credit score and credit history.

• Attractive Interest Rates –

Most lenders like NBFCs offer personal loans to borrowers at an attractive and affordable rate of interest. Generally, these loans have fixed rates which results in fixed and budgeted EMIs. The Mumbai people do not have to worry about the changing EMIs anymore.

• Hassle-Free Documentation –

The only documentations needed for availing a personal loan are address proof, income proof and an identity proof. Some lenders provide the facility of uploading these documents online while applying for the loan. Other lenders who have advanced procedures to verify the KYC details online do not require any of the documents. Thus applying for a personal loan is a no paper job.

• Flexible Repayment Terms –

One of the lucrative feature of personal loan is its flexible repayment term. The repayment tenure can vary from 12 months to 48 months. The higher the repayment tenure, the lower is the EMI and vice versa. So a borrower in Mumbai can plan his EMI as per his repayment capacity.

• Instant Approval and Quick Disbursement –

Most of the lenders in Mumbai provide instant personal loans. The lenders with advanced procedures for verification can instantly disburse the loan amount once the borrower accepts the terms like the loan amount, repayment tenure and EMI. The loan is directly disbursed into their bank account thus it is the best funding financial instrument to cover urgent cash requirements in the city.

• Versatility –

These unsecured loans do not have a predefined purpose attached to them. Once the loan has been disbursed it can be used for any planned or urgent purpose. Their versatility of having no-end-use restrictions makes them popular amongst the people of the city. The purpose for Mumbai millennial to borrow a personal loan may vary from dream wedding to vacations to buying expensive gadgets.

• An Easy Option To Improve The Credit Score -

Young borrowers with limited income can use personal loans to improve their credit score. They can avail a loan according to their repaying capacity. As they will pay the EMI regularly, they will be able to see an improvement in their credit score. But they need to be cautious. A missed or delayed payment of EMI will immensely impact their credit score negatively.

• Tax benefits –

Use of personal loan for construction or renovation of the house can get the borrower a tax exemption. The borrower must be aware of the rules and submit required documents to avail tax benefits related to personal loans.

Conclusion

Personal loans are popular amongst the young borrowers of Mumbai city. A personal loan is easily available to them with a comfort of adjusting its EMI as per their repaying capacity. A young borrower can use this loan to improve his credit score or to avail tax benefits.

While banks may provide cheaper interest rates, their approval processes are often longer and their eligibility requirements are more severe. Personal loans with minimal documentation are made easier by NBFCs such as IIFL Finance. In fact, IIFL Finance processes a personal loan application within minutes and credits the money into the borrower’s account within short time. Moreover, it also offers competitive interest rates than other NBFCs.