Does easy access to loans make things affordable to you?

Getting loans has never been easier. More and more banks, NBFCs and fintech startups are making it easier to access loans. Some promising loans with just click of few buttons. You can fulfill most of your needs via a loan, even if you are running short on cash.

easy access to loans

Suppose you need to buy a laptop.

No worries. There is a consumer loan (With easy 12 EMIs) which can help you buy that.

Want to buy a house?

No problem. There is a home loan!

Need to upgrade to your dream car?

Again, no problem. A car loan can always help you buy the car you always deserved!

Mobile phone? Vacation? Fashion? Lifestyle? – There is a loan for almost everything!

Need to repay your loans?

Well, there is a loan for this too!

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(Related – Is ease of borrowing pushing millenials towards debt trap? – Mint)

Contrast this with few years or decades back. Back then, access to credit was limited. Most of the people had to save before buying something (Not to glorify the past. Most of the human population is arguably much better now than any time in history)!

Average salaries in today’s time is much more than what it was earlier – they have probably risen faster than cost of things in general – at least in last few decades. Yet, lot of us, especially millennials are struggling to make ends meet and resorting to various kinds of (often unnecessary) loans!!

Affordability of things, for a lot of people, is defined by access and eligibility for loans, rather than ability to pay for it upfront.

(Related – Book – Who Me, Poor?: How India’s Youth are Living in Urban Poverty to Make it Big – by Gayatri Jayaraman)

Most of these things are not basic necessities, but have somehow become “necessities”, thanks to the lifestyle needs and easy access to loans.

At what cost this comes at?

For a lot of loan addicts, this may come at a cost of future financial health. While taking a loan, you are essentially borrowing from a future self. Unless there is change in financial habits (or maybe a windfall gain!) this debt cycle may not abate. In long run, this can have serious financial implications on your savings, investments, kids education, and retirement planning. We usually tend to underestimate how much money may be  needed!

Lifestyle is a choice. It is your choice whether to save and invest or borrow and chase lifestyle. Each come with their own set of benefits & drawbacks!

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