The festive season is upon us and people are gearing up to indulge in shopping, especially after easing of state-wise restrictions. According to a recent survey by Axis My India, there has been an increase in the overall consumer sentiment by 5.5 points as 42 per cent of Indian families are looking to spend more or the same as last festive season.
Another survey by Deloitte stated that consumers would be buying more discretionary goods, resume leisure travel, and are more confident about stepping out during the festive season.
Madhusudan Ekambaram, Co-Founder and CEO, KreditBee and Co-Founder, FACE says, “Big-ticket purchases like automobiles and electronics are likely to go up in the festive season, beginning October. Consumer motivation also goes up with attractive discounts and offers available during this period.”
According to industry data, for spending needs, consumers have shown an affinity towards financing options for managing debt, expenditures, and savings. Ekambaram adds, “Supporting them in this bid are the digital lenders and financial institutions, offering customized and effective financing alternatives. This allows the consumer room to spend, while not exhausting the liquidity and hindering their working capital.”
That being said, while opting for financing, experts say borrowers must be mindful of certain considerations, keeping in mind the present dynamic circumstances.
1. Borrow what you can repay: It is crucial for one to aptly evaluate one’s needs and borrowing appetite. Experts say one should not get carried away with tempting discounts or a festive spirit and end up with more debt than can be handled since financing products have interest rates and other associated expenses which might pose difficulties in paying EMIs on time.
“Make appropriate allocations to the capital for needs, wants, and savings. This will allow the borrowers to arrive at the role of the financed amount in the expenditures”, says Ekambaram.
2. Choose the right type of financial product: There are multiple financing products, customized to varied borrowers’ requirements. One must heed attention to parameters like tenure, amount and interest rates. Industry experts say certain products like small ticket size loans can be availed for smaller expenses or emergencies.
Ekambaram, says “Online purchase loans and Buy Now Pay Later (BNPL) have emerged as products of choice for multiple borrowers’ which provide convenient financing.”
3. Compare offerings from different lenders: Considering numerous options for financing products and lenders, one should always compare to arrive at the most suitable combination for one’s financing requirement.
Ekambaram points out, “Digital lenders should be compared basis parameters like their genuineness, product offerings, interests, and if any hidden charges are associated with their products.”
With the growing financial awareness and prominence of digital lending, wise spending has increased. Experts say, to enjoy shopping in the festive season, borrowers should be prudent about saving and effectively evaluate various alternatives at their disposal as well as consult the lenders to arrive at the most appropriate financing product.