Looking to take a loan for your discretionary spends? On Money Money Money, Sudipta Roy, Head of Unsecured Assets at ICICI Bank and Navin Chandani, Chief Business Officer of BankBazaar discuss what the banking industry will offer its credit card and personal loan customers in 2020. They also talk discuss if interest rates get cheaper and what is the best way to borrow smart.
Speaking about the personal loan and credit card trends in 2019, Roy said, “If we look at the numbers, especially in the formal economy and the disbursement on personal loans that we have and the credit card spends which is a proxy for consumption spending, we have not seen much of a slowdown.”
Chandani said, “The millennials, I would break them in three age groups. 22-27 and 27-34 are what I will call millennials. The first segment, which is 22-27, more than 75 percent of the people already have a credit card who is on BankBazaar. They are very digitally savvy. Then the 27-34 years of age, they are the largest segment and are borrowing the most, both on credit cards as well as on personal loans. So that segment is by far borrowing the most. The 34-45 which are the wealth warriors, they have to look at household expenses, education for children, so that is more discretionary and they know where and how to spend it.”
On outlook for 2020, Chandani said, “Two or three things are happening. The millennials will be given options to choose from either a lifestyle card, a travel card, a fuel card and there will be solutions created to that. UPI has done extremely well, and I believe UPI with credit is going to be the future.”
On the interest rates, Roy said, “Interest rates have been on a downward trajectory. It has been gradually moving down. However, I do believe that unless the RBI comes up with further repo rate cuts, the interest rates probably are at the lowest.”