Average size of personal loans getting smaller: Report

Average ticket size for personal loans down for the fourth year in a row From Rs 1.92 lakh in 2020 to Rs 1.86 lakh this year, the fourth edition of BankBazaar Moneymood 2022 revealed. The decline for loans being taken in non-metro cities fell to Rs 1.73 lakh from this year. 2.19 lakh last year. In comparison, the average size of loans taken in metro cities increased from Rs 1.87 lakh to Rs 1.91 lakh for the same period.

BankBazaar said this trend can be attributed to the rise of small and ultra-small ticket loans along with unsecured credit policies.

“The pandemic constraints increased the importance of credit cards as the first line of credit as well as the easiest payment mode. Pankaj Bansal, Chief Business Officer, BankBazaar.com, said, “With easy access due to contactless application processes through digital KYC, the demand for credit cards has seen a huge jump and it continues to grow.”

“In the coming year, we expect to see a similar uptick in loan segments as new originations return to pre-COVID levels riding on digital KYC.”

The report highlights the current year’s credit buying trends and the outlook for 2022.

The report shows an improvement in home loan demand in the last quarter of the current calendar year. “2021 was a year of change post-pandemic for home loans. Despite the reversal of the second wave of the pandemic, the year has been a time of growth,” it said.

Average ticket size for home loans increased 28.43 lakh in the first quarter of 2021 from 27.74 lakh in the previous quarter. This dropped in the second quarter with the outbreak of the second wave, however, from the third quarter onwards, the ticket size has increased again, the report said.