Why were the guidelines for personal loans altered?
Why were the guidelines for personal loans altered?
In recent years, there has been a sharp rise in the number of indians obtaining credit cards and personal loan debt. Unsecured loan growth significantly outpaced bank loan growth even in 2022. Over the past several years, an increasing number of people have been using credit and personal loans to meet their financial demands. The RBI has tightened the guidelines for this kind of loan in such a case.An unsecured loan is what?An unsecured loan is one that is granted without any kind of guarantee. The loan holder receives no guarantee or collateral in exchange for taking out such a loan. The bank considers the customer's credit score and credit history before granting an unsecured loan. Prior to granting an unsecured loan, the bank considers many factors such as the borrower's past loan repayment performance, income source, prior pay stub, or income tax return. Based on these factors, the loan is granted. When it comes to loans that are not secured, unsecured loans have higher interest rates and shorter loan repayment terms.Credit cards, personal loans, and student loans are a few types of these loans. Because this loan carries more risk for lenders than a secured loan, qualifying for it requires a better credit score. Unsecured loans include taking out credit card loans, personal loans, and school loans.
In recent years, there has been a sharp rise in the number of indians obtaining credit cards and personal loan debt. Unsecured loan growth significantly outpaced bank loan growth even in 2022. Over the past several years, an increasing number of people have been using credit and personal loans to meet their financial demands. The RBI has tightened the guidelines for this kind of loan in such a case.An unsecured loan is what?An unsecured loan is one that is granted without any kind of guarantee. The loan holder receives no guarantee or collateral in exchange for taking out such a loan. The bank considers the customer's credit score and credit history before granting an unsecured loan. Prior to granting an unsecured loan, the bank considers many factors such as the borrower's past loan repayment performance, income source, prior pay stub, or income tax return. Based on these factors, the loan is granted. When it comes to loans that are not secured, unsecured loans have higher interest rates and shorter loan repayment terms.Credit cards, personal loans, and student loans are a few types of these loans. Because this loan carries more risk for lenders than a secured loan, qualifying for it requires a better credit score. Unsecured loans include taking out credit card loans, personal loans, and school loans.