Current expenditure habits of millennial:
A mandatory cup of coffee costs 150 INR a day to a millennial. According to one of the surveys done in 2018, they are spending more of their incomes on being comfortable rather than on creating a safety net. About 32.7% of the income of a millennial is spent on food, followed by 21.4% on clothing and 11.2% on electronics. An Indian millennial tentatively saves about 10% of their income.
How digital lenders have made finance easy:
When it comes to spending, millennials are more spontaneous and jump at the offer to take low-cost EMIs/instalments whenever and wherever is necessary to make their lives easier. So, if they can’t fully afford it right now, they can afford it through little payments throughout a whole year. Millennials prefer to spread the burden of the payment of their purchase throughout the year, which, in their terms, is an easier option.
Digital lenders have made Personal Loans just few clicks away. Millennials love automation and that is what the digital lenders are leveraging in retail loans. These days’ people just need to fill few basic details, scan their documents through cell phones, upload them and they get loan sanctioned within hours and disbursed within 24-36 hours. (Even high-ticket loans of Rs 10 lakhs).
LoanTap uses technology to customize financial product and disburse them to the loan seekers in their desired timeframe. The ease of access – via WhatsApp, Mobile App, Website, text message – has made the entire process of availing loans really comfortable for millennials, versus the earlier generation who would sweat through the physical branches’ process or fret over Direct Sales Agents of banks to apply for a loan or to understand the progress of their loan application.
The innovation in design of loan products has changed the game! Loans are no more a burden on the pocket. Not only do they meet the requirements of millennials but also, provide a medium to manage finances efficiently.
Let us look at this new kind of personal loan that fits the pocket of this new generation.
EMI free loan, a type of instant personal loan that allows a borrower to pay only the interest every month, and the principal amount can be paid as bullet payments every sixth month, reducing monthly outflow by 40%.
- Bullet payment is calculated by dividing loan amount by number of 6-month periods in loan tenure. For e.g. for a loan of Rs 1 Lakh and 60 months tenure, bullet amount applicable would be Rs 10,000 in every 6 months
- Once a bullet payment is made towards the Principal, the total outstanding reduces, thus, interest is recalculated on the remaining outstanding amount
- EMI Free Loans is one of the most flexible loan products as one can prepay higher amount after 6 months and reduce monthly instalment, i.e., interest outgo, even further – at no additional charges
Why we suggest taking EMI Free Loan over Credit Cards?
Credit cards are the most common type of credit utilized for spending. Even though it is extremely convenient for the user, but in reality, this may lead to debt trap kind of situation if their utilization and payment cycle is not well maintained. Although credit cards have habituated individuals around the world to overspend, one must assess the option duly after comparison with EMI Free Loans.
|CRITERIA||CREDIT CARD||EMI-FREE LOAN|
|Monthly Instalment||INR 3000-5000 / lakh||INR 1200-1500 / lakh|
|Outstanding Payment||Within 30-50 days of utilization||Monthly Interest Payment, Principal Payment tenure can be 6 – 60 months|
|Rate of Interest||Usually 3-5%, Varies from one bank to another||1.5%|
|Maintenance Charges||Annual maintenance charges||No maintenance charges|
Advantages of choosing EMI Free Loan:
- No prepayment charges:
There are no prepayment charges after the initial six months, which means one can repay loan amount as and when one has higher cash inflow. Most of the traditional financial institutions levy 3-5% charges on pre-closure / prepayment.
- Minimum Documentation & Online process:
Minimum documentation is required towards loan processing and all the documents are uploaded online. The process is simple and LoanTap offers a seamless web experience for the same.
- Quick Disbursement:
The process is relatively simple and quick, with the help of algorithms, credit assessment is done almost immediately. Once the documents are uploaded and all the checks have taken place, the loan is usually disbursed within 24-36 hours
- Loan Customization:
The borrower is empowered to customize their loans based on individual requirements ranging from INR 1 Lakh to INR 10 Lakhs. The tenure would range from 6 to 60 months. LoanTap gives its customers the liberty to choose the tenure, loan amount and repayment plan according to their cash flow.
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