As the younger generation does not hesitate much to use credit for the purchase of goods and services, as well as traditional means such as bank loans and credit cards, various new avenues are emerging to make credit easily accessible. Besides credit card, buy now pay later (BNPL) etc., one of the lucrative options for accessing credit is line of credit.
As the country’s economy returns to pre-Covid levels, with people venturing for revenge and the wedding season underway, there is a resurgence in demand for credit across sectors.
To further stimulate demand, the Ministry of Finance announced a large national credit awareness initiative worth Rs 63,574 crore to secure credit to those in need.
To meet these demands, financial institutions including fintech platforms and banks are intensively curating creative and personalized products to meet the different credit requirements of borrowers, especially among Millennials and GenZs.
Line of credit is one of the new era products that allows you to borrow money repeatedly, up to a pre-defined limit, with interest payable only on the amount actually borrowed and not on the entire amount. the predefined line of credit limit.
App-based line of credit facilities generally provide consumers with instant funds of up to Rs 4 lakh, which can be used to take out personal loan and / or business loan etc.
Need money to cover irregular income? Try line of credit instead of personal loan, credit card
Based on their eligibility, clients are allowed to borrow as much as needed from the approved limit and repay in flexible EMIs for up to one year. In addition, interest is only charged on the amount borrowed and not on the total limit of the approved line of credit.
Thus, lines of credit provide consumers with easy access to a personal financial reserve that can be used for emergencies, shopping, or any other purpose.
Due to the features of the line of credit such as convenience, flexibility, easy access to cash and no interest on unused credit amount, it is becoming popular among new generation customers.
According to digital lender CASHe, which has disbursed loans worth Rs 100 crore under the only line of credit in the past six months with overall growth of over 40% MoM, demand maximum comes from the main metropolitan cities of Bangalore, Chennai and Hyderabad. , with an average loan size of Rs 28,000 to Rs 30,000.