Personal Loan Price Hike: Personal loan prices hike again in a month

Personal loan figures during the financial year ending March are indicating an increase in consumption in the country. Personal loans grew by 20.4% annually in February. In the first month of the financial year i.e. April-22, the loans of this category had increased by 14.7%. According to the research report of the Bank of Baroda, the growth of personal loans was more than 20% in January this year and in December last year as well.

Data from TransUnion CIBIL indicates that youth have played a major role in driving credit demand in India. The dependence of Indian youth on credit card spending, consumer durable loans, and personal loans is on the rise. For example, loan inquiries from people in the age group of 18-30 years increased from 5% to over 40% in just one year.

Home loan growth above 15% for the 9th consecutive month Housing loans increased by more than 15% month-on-month for 9 consecutive months till February last financial year. Loan growth in this category stood at 15% in February, compared to 13.8% in April. But since June last year, the loan growth of this category has been above 15% continuously.v

The trend of taking loans against gold ornaments has reversed.

Interestingly, in April 2022, there was a 3% decline in loans taken against the pledge of gold ornaments. In May also the demand for such loans decreased by 2.9%. After that, it started increasing slowly and this year By the end of the year, the growth of loans in this category was 20%.

No effect of increasing interest rates Bank of Baroda Chief Economist Madan Sabnavis said that overall it seems that the increase in the repo rate has not affected much the offtake of personal loans so far. Other loans have been affected more.

Savings are more along with spending, investment in equity funds increased by 31% last month Interestingly, with the increase in the trend of taking personal loans to meet basic needs in the country, investments are also increasing. According to Amfi data released on Thursday, in March, investment in mutual funds investing in equity ie shares increased by about 31% to Rs 20,534.21 crore.

In comparison, there was a net investment of Rs 15,686 crore in equity schemes during February. This also means that the increase in volatility in the stock market has not affected the sentiment of common investors. Most of the investments in mutual funds are for the long term.