Don't go overboard taking loans just because the lender is generous

While NBFCs are increasingly willing to lend to below-prime borrowers, the latter should remember that failure to repay can have dire consequences

The economic slowdown has taken a toll on the growth rates of secured loan segments, such as home loan, loan against property, and car loan. Credit card borrowings and personal loans are still growing at a robust pace as people turn to them increasingly for emergencies and sometimes even to fund discretionary purchases. An interesting trend that a recent report from TransUnion CIBIL highlights is that lenders, especially non-banking finance companies (NBFCs), have started lending more aggressively to below-prime borrowers.

In the second quarter of 2019, credit-card outstanding balances showed a robust 34.3 per cent y-o-y growth. Personal loans grew