“How can I improve my credit score?” was the most pressing financial issue for 35 percent of respondents, for 20 percent it was “How do I pay off loans faster?”
In India, medical emergencies, child rearing, wedding expenses have emerged as the main reasons for taking out personal loans.
NIRA, a consumer finance company, released a survey titled “Understanding the Financial Challenges of Working India,” which found that 28% of personal loans are taken out for medical emergencies, while 25% are for family needs such as children’s education, home renovation. and wedding costs.
The report says most of them earn modest salaries that roughly cover their daily expenses and leave no additional resources for unforeseen expenses, meaning that up to 77% of people have relied on loans. personal unsecured to make ends meet.
The report also indicates that 41 percent cited the interest rate as their primary criteria for choosing a lender, while 30 percent cited loan duration and the 20 percent disbursement timeframe as their primary criteria.
Rohit Sen, CEO and Co-Founder of NIRA, says: “Young workers in India have to take on a lot of responsibility. They work hard to make ends meet, but struggle to keep up when faced with unforeseen or greater costs than usual. Since they cannot borrow from banks, they turn to local lenders who usually charge them more than 100% interest, further aggravating their financial difficulties. “
Some of the main findings of the survey;
87% managed their own finances, including filing taxes and tracking IMEs, 55% relied on family and friends for financial information, and 25% took to social media for information. Interestingly, 5% contacted a chartered accountant for help with financial documentation. Most of the respondents had no savings beyond traditional methods such as a savings account, cash, fixed deposits and gold. 40% prefer gold as a mode of investment, even if gold gives no return; Only 12% held some form of equity investment, such as mutual funds or stocks, 60% of individuals’ monthly income went to family, 20% to rentals, 8% to daily commutes, and 12% except as savings – leaving very little to invest in retirement or long-term financial instruments. 80% preferred to use Net Banking for transactions and 66% were comfortable using UPI to send or receive money. Only 7 percent of them still used cash or checks. “How to improve their credit score?” was the most pressing financial issue for 35 percent of respondents, for 20 percent it was “How do I pay off loans faster?”
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