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Business News/ Money / Personal Finance/  Small-ticket loans: How to start your credit journey amid the festive season?

Small-ticket loans: How to start your credit journey amid the festive season?

The changing outlook on credit has far-reaching implications beyond transactions, shaping future financial opportunities like loans, homeownership, and job prospects significantly.

Accessing credit has become integral in our financial livesPremium
Accessing credit has become integral in our financial lives

The festive season in India is much more than just a time for celebration. It's a time when families come together, homes are adorned with lights and decorations, and everyone eagerly anticipates the joyous times ahead. But in recent years, the festive season has taken on another dimension—it has become the ideal time for many to start their journey into the world of credit. Millennials and Gen Z are more excited about the new things they can do with credit rather than just the idea of credit itself.

This shift in perspective is quite significant. Having access to credit has become a vital part of our financial lives, with its impact extending far beyond just purchasing goods and services. It is crucial to emphasise how credit can significantly influence various financial opportunities, such as future loans, mortgages, and even job prospects.

Importance of good credit score

Understanding the significance of a good credit score is essential. It acts as your financial report card, exerting a profound influence on various aspects of your financial life. Lenders rely on your credit score when you apply for loans, making a higher score crucial for increasing your chances of loan approval and securing favourable terms like lower interest rates. A strong credit score can also lead to lower interest rates on loans, resulting in substantial savings over time. Additionally, it plays a pivotal role in mortgage approval, job prospects, increase in credit limit, providing you with greater financial flexibility.

Advantages of small loans

Small loans, particularly during the festive season, offer an excellent starting point for those new to credit. They come with several advantages, including lower risk due to smaller borrowing amounts, and providing an opportunity to practise budgeting. Moreover, they aid in establishing a credit history, a crucial factor in building a high credit score. Quick approval of small loans is beneficial, especially when you want to make prompt festival season purchases. Additionally, these loans often have lower interest rates compared to larger ones, resulting in savings on interest payments while building your credit history.

Festive season offers and discounts

The festive season in India is a time of grand celebrations and joyous extravagance. It's that special time of the year when people eagerly indulge in shopping sprees, fulfilling their desires for a wide range of items, including the latest home appliances and electronics, trendy lifestyle products, exquisite gold jewellery, stylish home decor, and exciting travel packages. 

Retailers, whether they operate online or have brick-and-mortar stores, fully comprehend the festive spirit that sweeps across the nation during this time. To tap into the festive fervour and attract customers, these retailers roll out a plethora of attractive discounts and irresistible deals. For individuals who are new to the world of credit, this festive season becomes the perfect opportunity to maximise these offers and embark on their credit journey.

Festive season's ideal credit choices— personal loans and credit card loans

The festive season has brought a treasure trove of offers from banks, e-commerce giants and other big brands, all aimed at capturing the hearts and wallets of enthusiastic shoppers. Personal loans also offer collateral-free financing thus making it a preferred option. Besides, they are accessible and budget-friendly. On the other hand, credit card loans offer convenience and flexibility for cardholders, allowing them to convert purchases into instalment plans while enjoying rewards and cashback benefits. Both credit solutions help in building and strengthening your credit history, ensuring a brighter financial future in the process.

In summary, the festive season isn't just about celebration; it's the perfect time to kickstart your credit journey. Building a good credit history opens doors to financial opportunities. For credit newcomers, starting with small loans is a wise, low-risk move. Small loans offer manageable repayments, budgeting practice, and a chance to establish credit. 

The festive season also brings discounts, making it an ideal time for loans. Whether you opt for personal loans or credit card loans, No-Cost EMIs, or Buy Now, Pay Later options, these financial solutions allow you to celebrate while simultaneously establishing a solid credit history. As the festivities begin, start your journey with small loans for a brighter financial future.

Akshay Mehrotra, Cofounder & CEO, Fibe


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Published: 16 Nov 2023, 01:14 PM IST
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