Do Millennial Women Take More Loans than Men?

20 Jan 2020 // 22 min read // Home Loans
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The millennial generation is contributing significantly to the growth of the financial industry globally. Individuals from this generation are readily availing different types of loans to finance their lifestyle and leisure related expenses, in addition to emergencies. Consequently, many financial institutions have introduced different types of loans and Credit Cards to cater to the ever-evolving needs of the millennial generation specifically.

Though one aspect related to this trend that has grabbed the attention of everyone is the fact that millennial women are now availing more loans than men. Yes, women are now leading the charge when it comes to borrowing. Whether it is a Home Loan, Personal Loan, Wedding Loan, or a Credit Card, the percentage of women applicants is rising.

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Rise in borrowing by Millennial women: In Numbers

There have been various reports published by credible agencies that highlight the trend of a significant rise in the number of millennial women availing loans. Some of the noteworthy trends are:

  • As per a report published by TransUnion CIBIL, credit applications from women have witnessed a growth of 48% between 2015 to 2018.
  • A survey conducted by ZestMoney in 2019 revealed that the average loan amount availed by women is 35% higher as compared to men.
  • Another report released by CASHe, a leading online finance company, states that the number of women taking loans has grown by almost 18% in the last couple of years.
  • The average ticket-size for loans availed by women in 2018 was Rs 27 Lakhs as compared to Rs. 23 Lakhs by men. This trend has been witnessed across all major cities of India during this period.
  • An average CIBIL Score of women in India is much higher than men at 770+.

Rise in borrowing by Millennial women: Reasons Behind

If you are wondering about the reasons behind the rise in a number of millennial women taking loans, then here are the major factors contributing to the trend:

  • More working women: It is a widely known fact that the number of working women in India has been rising steadily. Working women are more aware of their finances and have higher purchasing power. This better purchasing power has lent them higher confidence levels that allow them to opt for different types of loans for their lifestyle aspirations as well as emergency situations. They are able to easily repay the loan EMIs from their business income or salary without requiring any external help.
  • Better incentives on Home Loans: Home Loans are amongst the most popular financial products availed by women borrowers. Banks and NBFCs offer better incentives on Home Loans for women borrowers. For instance, when it comes to SBI Home Loan, the SBI Home Loan interest rates for women are 0.5% lower as compared to men. Most lenders follow this trend. Additionally, in many states in India, the stamp duty for registration of a property for women is much lower than men. Such benefits, incentivise the decision to avail the Home Loan in the name of the woman borrower, contributing to a rise in borrowing by women.
  • Dedicated products: Other than Home Loans, lenders also offer dedicated financial products for women such as Business Loan, Personal Loan, Gold Loan, and Credit Cards. These offerings have relaxed eligibility criteria and better interest rates for women applicants. As a result, working women readily avail of these offers, thanks to their rising financial awareness. For instance, many banks are now offering exclusive credit cards for women that offer them with bonus reward points and discounts on certain transactions such as lifestyle, movies, and dining. The ready availability of customized financial products is also a significant reason behind rising borrowing by women folks.
  • Better profile: There is a general understanding that most millennial women come from double-income households. Whether it be the spouse or parents, most women live with their family and contribute to the income of the household, consequently improving the household eligibility for a higher amount. This hypothesis explains the increasing ticket-size of women applicants.
  • Awareness about their Credit Score: As per the data shared by CIBIL, 38% of female borrowers monitor their Credit Score regularly. Moreover, the average CIBIL score for women in India has been pegged at around 770+, which is regarded as excellent by lenders. The rising awareness about the importance of a good credit score indicates increasing financial literacy. As a result, loan applications from women applicants are generally approved more frequently.
  • Lifestyle aspirations: It is not a secret that women like to spend money. Whether it be shopping, travelling, dining, or leisure, millennial women do not like to hold back too. This go-getter attitude helps them move over the usual doubts that some traditionalists have against borrowings. Women readily go for consumer loans, personal loans, credit cards, and two-wheeler loans if they feel the need to buy something.
  • Start-up culture: The rising trend of Start-Ups in India has seen increased participation from females entrepreneurs too. It is now not uncommon to see women leading the board rooms and running large business units. A growing number of female borrowers are now taking Business Loans to start their ventures and satisfy their entrepreneurial ambitions.

Also Read: 5 Smart Reasons Why Millennials Prefer to Pay Home Loans on Time

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