Small ticket loans come as a huge relief to first-time borrowers who seek such loans for any financial emergency or day-to-day needs.
While the need for credit has always been there, not everyone is fortunate enough to get such financial aid with ease. For long, various financial institutions have been unwilling to lend money to the underserved Indian populace, mainly due to low credit score or no credit history. As a result, this category of people that includes both salaried and self-employed millennials, mainly between 25 and 45 years of age, fail to resolve their financial emergencies and fulfil their aspirations. Eventually, when left with no choice, they end up borrowing from their friends or relatives.
This is where new-age lending platforms come into the picture.
Apart from simplifying and boosting India’s lending scenario, these digital lenders make short-term, small personal loans easily accessible to everyone. What makes them unique is their 100% digital approach to facilitating instant small-ticket loans – as low as Rs 5,000.
Let’s say a consumer is planning to buy the latest smartphone priced at Rs 15,000. He has managed to save Rs 10,000. However, now that he is facing a shortage of Rs 5,000, he either decides to settle down with some other brand that falls in the budget or completely drop the plan. Short-term, small personal loans can be a huge relief in such cases, as it can enable him to borrow the remaining amount, then and there, in not more than 10 minutes. All he needs to do is select the loan amount and tenure, upload the relevant documents and receive the money in his bank account within 10 minutes.
These loans come as a huge relief to first-time borrowers who seek loans of such size for their day-to-day needs. The idea is to build up the credit history of first-time borrowers and help them become eligible for other long-term, high-value loans that they may require in the future.
These new-age digital lenders don’t intend to compete with other financial institutions but complement them at every step. Eventually, doing so will help bridge the gap between financial institutions and customers, especially when it comes to small loan size and shorter tenures that conventional institutional lenders typically don’t cater to.
Lucrative benefits of small ticket loans
People prefer short-term loans because of their multiple lucrative benefits. For instance, these loans can be used for various purposes – be it home renovation, education expenses or even buying a refrigerator – the choice is yours. These new-age loans also offer faster accessibility – it takes not more than 10 – 15 minutes to have it credited to your account with minimum documentation. This means you get instant loan approvals without waiting for too long.
Small ticket loans have turned out to be popular among the country’s millennial who are fascinated by the idea of investing in their passion. As a result, such loans have emerged as a credit buddy for all their basic financial needs and aspirations, gaining widespread popularity across India. All these impressive features and offerings certainly make instant personal loans more accessible than credit cards.
Roadmap to future
With more and more players debuting in this category and offering lucrative lending features – be it instant loan approvals, flexible repayment options or 100% digital transaction – digital lending in India is set to grow rapidly in the coming years. Slowly but steadily, this phenomenon is expected to attain a wider acceptance PAN-India and emerge as the most sought-after borrowing option for everyone including low-salaried individuals, while helping them meet short-term financial emergencies in a jiffy.
(By Jitin Bhasin, MD, Rupeeredee)