In the past, Gen X would typically opt for personal loans to check off essential milestones from their list. Buying a house, funding their children’s education, getting their children married, and maybe even purchasing a car – these were the primary reasons that drove middle-class folks from Gen X to avail a personal loan. Now, with most of Gen X inching closer to retirement, and with millennials coming of age, personal loans continue to be popular. However, the reasons they’re availed for have changed.
A closer look at the borrowing habits of Indian millennials reveals that unlike their parents, people in their twenties and thirties aren’t really keen on availing a loan only to buy a home or to meet wedding expenses. The reasons millennials borrow are diverse and more interesting. India’s young working generation primarily chooses personal loans for travel to fund their travel plans or to purchase expensive consumer durables.
With no collateral being required, it’s easy to obtain personal loans at short notice. On Finserv MARKETS, you can avail personal loans up to 25 lakhs at attractive interest rates starting as low as 12.99%. Whether you’re a salaried employee or a self-employed professional, on Finserv MARKETS, you can find solution tailor-made exclusively for your requirements. And if you’re like most Indian millennials, you probably have a long list of places you want to explore and gadgets you want to buy. With personal loans available on Finserv MARKETS, you can check those entries off your list one after another.
Meanwhile, here’s a closer look at two primary reasons driving Indian millennials to opt for personal loans.
To satisfy their wanderlust
Young working professionals in India are increasingly turning to personal loans to fund their travel plans. Whether it’s an impromptu weekend trip to a hill station nearby or a well-planned international trip, these unsecured borrowings are becoming popular with Indian millennials. As a report by IndiaLends revealed, there has been a 55% increase in personal loans taken for funding travels. Of these, 85% appear to be millennials seeking personal loans ranging from Rs. 30,000 to Rs. 2,50,000.
The trend indicates that most Indian millennials choosing to travel abroad with borrowed funds tend to opt for destinations that offer visa on arrival. This is perhaps because many of these travel plans may be last-minute decisions. Millennials also appear to be prioritizing travel plans over other life goals in order to enjoy as much work-life balance as they can. With working days getting longer and options like freelancing and work-from-home lifestyles blurring the thin line between work and leisure, it’s only natural that young working professionals seek to borrow so they can take a break and satisfy their wanderlust.
To purchase consumer durables
Another reason Indian millennials are resorting to availing personal loans is to purchase the consumer durables on their wish list. The consumption patterns in the country are being redefined because Gen Y, being the chief wage earners in the country comprising 47% of the working population, have high levels of disposable income. Being digitally savvy and technologically inclined, it’s no surprise that Indian millennials are opting for innovative gadgets and solutions for their everyday requirements.
To finance these big purchases, the younger working population in the country prefers EMIs and personal loans instead of saving up to buy the goods in question. With many popular brands gaining a stronger presence online, there’s a strong desire among millennials to keep up with the latest offerings from these manufacturers and service providers. The younger generation favors EMIs and personal loans for all kinds of purchases, whether it’s to own the latest smartphones, swap out an old laptop for the newest version in the market, or to purchase home appliances like refrigerators, washing machines, and ACs.
What makes personal loans so popular among Indian millennials?
Millennials in the country appear to have valid reasons behind their collective preference for personal loans. Here are some reasons why these unsecured borrowings are so popular for funding the millennial dream.
- To fund trips to international destinations, it typically costs lakhs of rupees. This may seem like an exorbitant amount, but when you break it down into monthly instalments or repayments of a few thousands, it gets easier to repay. EMIs soften the blow and are less intimidating than spending lakhs at one go.
- With the younger workforce resorting to personal loans at an increasing rate, banks and NBFCs are stepping up to the task and offering many attractive incentives like lower rates for women and flexible repayment options. On Finserv MARKETS, for instance, you can opt for a Hybrid Flexi Personal Loan that comes with many customer-centric features like interest-only EMIs, unlimited withdrawals, and quick online processing.
- Another reason millennials have taken to personal loans is because of the various sources they can be availed from. The typical process of applying for a personal loan from a conventional bank can take days to be completed. However, with digital lending and peer-to-peer platforms, it’s easier to obtain funds almost instantly. Since many millennials plan their vacations at short notice, it’s more convenient for them to apply for personal loans or travel loans online, get approved quickly, and get access to the funds they need.
Personal loans also allow Indian millennials to opt for better consumer durables and to increase the quality of a vacation, because a little extra money can go a long way. It gets easier to travel to international destinations or to purchase high-end gadgets with unsecured loans making additional funds available to borrowers. If you’re a salaried employee with a good credit profile, you’ll find that it’s particularly easy to obtain a personal loan. And with many digital lending platforms, NBFCs, and peer-to-peer lenders making funds available in a hassle-free manner, the time is ripe to use personal loans to your advantage.