The best thing about personal loans is that it doesn’t impose any restrictions on how you will be using the borrowed amount. One is completely free and flexible to use the money however they see fit. Given the plethora of opportunities and options Millennials and GenZ have, it is best to go with a flexible loan option like a personal loan. It is also a good fit as it doesn’t demand an asset as security against the loan.
This is different from a car loan or a home loan where an underlying asset is there to back the loan. It also makes it more accessible for commoners who might not be in a position to pledge any asset. Read on to know more about ‘personal loan apply’ and how Millennials can fulfil their financial needs with personal loans.
What can be done using a personal loan?
A personal loan should be wisely used to meet your urgent and immediate financial obligations. These obligations can arise out of different needs including education, medical bills, vacation, utility bills, home rent, home renovation, etc. So, it can be used for pretty much everything. However, should not be used as a long-term debt tool to finance a big investment. Over the past two decades, the internet and social media have shaped our lives and altered our spending habits. The proliferation of e-Commerce has made most of us addicted to online shopping.
You will be surprised to learn that the share of millennials and young borrowers in the personal loan category has increased from 27% to 41% over two years. This is primarily because of two reasons. The first one is that Millennials contribute heavily to consumption demand stats. Secondly, the Millennial population is better educated to understand the importance and benefits of personal loans as a financial tool to manage expenses. Here’s what people are doing with different types of loans in the contemporary.
Use of Different Types of Personal Loans:
- Wedding planning
A wedding ceremony certainly demands a lot of funds if you are planning to make your special day extra special. It is one of the most important milestones in a person’s life and should be celebrated with great enthusiasm. A personal loan can help you plan your dream wedding at your favourite destination with your best people without worrying about managing expenses in real-time. From décor and catering to jewellery and apparel, there’s a lot to be taken care of in any wedding.
- A better lifestyle
Most Millennials are using a personal loan as a tool to improve their living standards. In an age dominated by social media, it can be hard to keep up with everything that your peers are doing. Upgrading your lifestyle through a personal loan is recommended only when you have sufficient income to repay your debt on time. It is good to defer some expenses over the next few years, however, you should plan your finances accordingly before taking a loan. A better lifestyle will certainly add to your confidence and broaden your outlook to a great extent.
- Medical bills
Another important reason for borrowing money through personal loans is medical bills. In the aftermath of the global COVID-19 pandemic, medical bills have become a huge percentage of the total monthly expenses for most people. Hospitalization costs can be quite high and this drains you out financially. It is advisable to manage these bills through personal loans so that you have ample time to plan your budget and repay the loan amount through EMIs.
The latest developments in Millennial consumption spending show an increase in travel-related expenses. This has drastically increased in recent times. One plausible explanation for this development is the lockdowns during the pandemic. People were forced to stay inside their homes due to nationwide shutdowns. Now that everything is open, they want to make the most of it by travelling to new places. The wanderlust has greatly contributed to the demand for personal loans.
Upskilling oneself never goes out of fashion and this can be witnessed in people’s demand for educational loans. The personal loans designed for educational purposes help people to study at their favourite university without immediately worrying about tuition fees and other related expenses. More Millennials are planning to upskill themselves as the technology keeps evolving.