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Summary: Personal loans are among the most widely used financial offerings for both individuals and businesses. This blog covers the latest search trends in the personal loan industry, how personal loans can be used, the types of personal loans, and more.
In India’s growth story so far, banks have been the leading lenders when it comes to the personal loan market. However, the personal loan industry in India is becoming more dynamic very quickly with several new FinTech companies, NBFCs (non-banking financial companies) and various forms of digital credit companies rising up as loan providers.
In our newest Personal Loan Search Trends Report , we help you understand the changes in customer behaviour based on an investigation of more than 18,000 keywords. This includes branded and non-branded keywords, query types and search volumes. Let’s take a look at how the personal loan market is evolving and how your business can stay ahead in an increasingly dynamic environment.
Personal loans are a great way to streamline your finances or expenditures during an emergency. Whether you’re trying to consolidate your debt or pay a large unexpected bill, a decent credit score and a fixed source of income are enough to get loan approval.
While most personal loans are unsecured, some institutions offer secured loans as well. They differ from unsecured loans in several ways.
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In 2020, the global market for personal loans was valued at USD 47.79 billion, projected to reach USD 719.31 billion by 2030. This comes to a compounded annual growth rate of 31.7% every year from 2021 to 2030.
With the ease of loan approvals and higher credit limits, more and more customers are choosing personal loans as a means of credit.
However, the personal loan market’s growth is also limited by factors like bad debts among people availing personal loans, the high fees and late payment penalties charged by creditors. Despite this, developing economies like Malaysia, China and India have large sections of their populations dependent on personal loans for a better standard of living.
Therefore the personal loan market regulations in these countries provide several lucrative opportunities for personal loan providers to expand offerings and services across the country.
Additionally, several personal loan companies have started expanding into or switching entirely to digitized business operations.
As a result, implementing and adopting technologies like Big Data analytics, IoT, chatbots and AI has become much easier and has also seen widespread adoption. This is anticipated to open new roads for the personal loans market in the years to come.
A personal loan is an adaptable financial tool that people can use for several purposes such as unexpected emergencies, debt consolidation or emergency travels. Personal loans are usually unsecured loans and don’t require any collateral to be mortgaged. This makes them highly lucrative for audiences looking for faster access to cash.
Take a look at the table below.
According to this data, personal loans make up about 35% of the credit that commercial banks extend to every sector. Since the second half of FY2021, the personal loan amounts outstanding have almost doubled, growing at a much higher rate than the overall credit which grew 1.6x.
This could point to a concerning trend given that most of the borrowings go towards non-productive expenses instead of towards creating productive assets.
It also signals a sudden growth in unplanned expenditure which means financial security among the population is low, forcing them to turn to credit to make ends meet.
Financial technology companies, also called Fintech companies, currently hold a 52% market share in the personal loan market according to an Experian India report. According to the report, these companies have given out more than INR 2.48 trillion in personal loans and over INR 28,607 crore in business loans till March 2024.
Most of these loans were issued as loans under INR 50,000 at a time to NTC (new to credit) individuals. At this pace, Fintech companies are projected to double their customer base to 200 million customers in the next three years, given that they navigate all the customer behaviour changes and challenges that come up.
According to our Personal Loan search trends report, the rise in personal loan-related searches in India has been rapid, which indicates a change in customer behaviour unlike any seen in the past.
These Google searches for personal loans extend to vehicle purchases, home buying, wedding or medical emergencies and many other requirements. How useful is this data? Are there any hidden growth opportunities for personal loan providers? Let’s find out.
Against the backdrop of India’s dynamic finance sector, NBFCs, fintech companies and traditional banks today have the opportunity to leverage real-world opportunities for growth using insights taken from very real customers among their target audience.
Our search trends report evaluates how customer behaviour has evolved and how you can analyse this behaviour and predict future changes in behaviour to build a stronger digital presence and further personalise your bank offerings.
We have investigated more than 18,000 keywords to find patterns in branded and non-branded keywords, volumes and types of personal loan queries, growth opportunities and much more.
| Category | Search volume FY’22 | Search volume FY’23 | % Growth |
|---|---|---|---|
| Personal loan | 51.64L | 64.92L | 25.73% |
Note: K = Thousand | L = Lakh (1 Lakh = 100,000) | Cr = Crore (1 Crore = 10 Million) | SV = Avg. Monthly Search Volume. Traffic & Sessions are as per SEMrush.
The graph above shows that personal loan-related queries have increased by 25.73% in FY’23. This should be a strong sign of the rapid growth in the number of customers who require credit to meet their needs.
With the personal loan industry quickly becoming more dynamic, businesses must capitalise on the momentum of loan trend searches online by aligning their digital marketing strategies with the changes in customer behaviour.
What are some steps you can take to optimise your offerings and reach the right audience segments?
The three biggest opportunities for growth within our search trends report are:
Let’s take a detailed look at these growth opportunities.
According to the findings in our Search Trends Report, ‘personal loan with low credit score’ and related searches have increased by 55.57% in a single year.
It is clear that there is a growing segment of the population looking for new ways to supplement their income while realising that their low credit scores pose a significant challenge. Additionally, several digital finance platforms already offer loans to people with low credit scores.
Despite this, the 55.57% growth in online searches remains an untapped opportunity. Finance companies and NBFCs have the chance to position themselves as more inclusive financing partners that help customers overcome their credit-related challenges.
According to our report, non-branded keywords related to personal loans have a significantly higher search volume as compared to branded keywords.
Non-branded keywords have been observed more in local or regional searches with a steady search volume growth rate of 16.65% in the past year.
Vernacular search volumes
| Category | Search Volume FY‘22 | Search Volume FY‘23 | Growth % | Market Share |
|---|---|---|---|---|
| Branded | 2.18K | 2.74K | 25.69% | 4.68% |
| Non-branded | 52.62K | 55.81K | 6.06% | 95.32% |
| Total | 54.80K | 58.55K | 6.84% | 100% |
Note: K = Thousand | L = Lakh (1 Lakh = 100,000) | Cr = Crore (1 Crore = 10 Million) | SV = Avg. Monthly Search Volume. Traffic & Sessions are as per SEMrush.
Overall, non-branded local SEO searches hold an unbeatable market share of 99.62% and continue to predominantly drive local interest in the personal loan market.
Like local SEO searches, vernacular searches have also seen non-branded keywords dominate the market. They hold 95.32% of the market share, with branded keywords making up less than 5% of all searches.
While there are multiple new personal loan providers entering the market today, non-branded keywords related to personal loans still offer the largest opportunity for creditors to stand out among consumers.
With all these examples, creating a comprehensive regional or hyperlocal SEO and marketing strategy to address both brand and non-brand keyword categories can effectively help you break into the landscape of local personal loan searches.
Now that you know the opportunities that exist, what are the steps you can take to act on these insights?
Here are a few proven steps to maintain your edge in the financial sector as a personal loan provider.
Data from one PolicyBazaar report shows that Indian consumers manage at least three accounts for credit in their late 20s, with most salaried individuals getting their first credit card at 28 and self-employed individuals getting theirs at 30.
By 2023, about 38% of the consumers requesting a credit score at Paisabazaar were below 30 years of age, with 17% being under 20%. Less than 30% of customers were between the age gap of 30 to 40.
With easier access and growing awareness, most Indian consumers today use credit from an early age to meet several types of needs. The study showed that 64% of consumers got their first credit product before 30. Of all these, about 37% were below 25.
Only 23% of consumers were between 30-40, one of the rarest statistics to be seen. There was also a 13% slice of the audience pie that accessed credit only after 40. More than 20% of consumers got their first credit card or personal loan before the age of 25.
The credit report by Paisabazaar also showed that 41% of salaried professionals and 34% of self-employed consumers took their first form of formal credit before turning 25.
This shows that younger members of the workforce with the means to repay a loan are becoming increasingly credit savvy compared to the previous generations.
The proportion of both self-employed and salaried consumers decreased after 40 years of age, with only 8% of salaried employees and 14% of self-employed consumers borrowing after crossing that age.
This report also showed that 20% of personal loans are used for holiday-related expenditures. 21% of survey participants who took personal loans in Q1 and Q2 of 2023 used them for flight tickets, booking hotels and other miscellaneous expenses like shopping or visa extensions.
According to a survey by Saral Credit, about 67% of India’s population has taken personal loans one or more times so far. It showed that 36% of those surveyed used a personal loan for home renovation, while 9% used it for vacations or travel experiences. However, borrowers stated that they always considered the interest rates while choosing where to take the personal loan from. 77% of respondents preferred taking a personal loan from banks, but a quickly rising 14% chose NBFCs for their financial needs.
It’s worth noting that the personal loan demand in India continues to grow despite the increasing interest rates. The trend is that rising interest rates discourage individuals from borrowing, but that has not been the case.
Customers take personal loans for several reasons. While some make more sense for long-term financial stability, others help them improve their standard of living and fulfill short-term goals.
Our search trends report shows you the top 20 players in the personal loan market, based on branded keywords that customers search while looking for personal loans.
The top players continue to be the traditional lenders – HDFC Bank, BoB (Bank of Baroda), State Bank of India (SBI), Axis Bank and ICICI Bank.
These personal loan providers continue to lead the personal loan market in terms of search volumes with branded keywords.
| Brand | Search Volume FY’22 | Search Volume FY’23 | % Growth | Market Share |
|---|---|---|---|---|
| HDFC Bank | 701.95K | 751.90K | 7.12% | 23.46% |
| SBI | 579.18K | 564.56K | -2.52% | 17.62% |
| Bank of Baroda | 97.46K | 252.04K | 158.61% | 7.87% |
| ICICI Bank | 173.66K | 194.95K | 12.26% | 6.08% |
| Axis Bank | 154.16K | 160.43K | 4.07% | 5.01% |
| Bajaj Finserv | 130.28K | 124.30K | -4.59% | 3.88% |
| Kotak Mahindra Bank | 70.19K | 116.68K | 66.23% | 3.64K |
| MoneyView | 44.16K | 107.44K | 143.50% | 3.35% |
| PNB | 43.29K | 73.50K | 69.79% | 2.29% |
| Tata Capital | 31.84K | 53.51K | 68.06% | 1.67% |
Note: K = Thousand | L = Lakh (1 Lakh = 100,000) | Cr = Crore (1 Crore = 10 Million) | SV = Avg. Monthly Search Volume. Traffic & Sessions are as per SEMrush.
According to our findings, HDFC Bank has shown a significant search volume growth of 7.12% from 2022 to 2023, maintaining and solidifying its lead as the top personal loan provider.
Meanwhile, SBI comes in second but reports a decline of 2.52% in search volumes which reflects a marginal dip in customer interest in SBI personal loans during the same period. However, despite this drop, SBI retains a dominant 17.62% market share that maintains its market leadership.
Another rise we found was in the 158.61% increase in Bank of Baroda personal loan searches. This demonstrates a meteoric rise in interest when it comes to BoB’s personal loan offerings.
NBFCs and fintech companies are quickly diversifying their credit offerings. They are growing rapidly as sources of credit because of their personalised service offerings, robust risk management frameworks, wider reach and stronger digital presence. Organisations like L&T Finance and Bajaj Finserv have seen a rapidly growing market share because of their 100% digital application process.
Other reasons include:
When customers apply for a personal loan, several macroeconomic and social factors affect the interest rates and eligibility, besides personal factors like the borrower’s credit score. These include the following.
1. Repo rate: The RBI (Reserve Bank of India) lends to commercial banks at a predetermined repo rate. When this rate goes up, banks consequently increase the interest rates on their loans. Therefore, in a market with a high repo rate, personal loan rates will also go up and vice versa.
2. Inflation: When a country’s economy is faced with higher inflation, personal loan interest rates will also be high. High inflation rates also increase the costs of goods and services while reducing the value of money that consumers purchase. To deal with inflation, the RBI increases its rates of interest, like the repo rate, to reduce the amount of money being borrowed as well as discourage spending. This brings down the prices of goods and consequently the inflation levels as well. Other macroeconomic factors include government policies and credit market conditions.
3. Changing customer behaviour: With more banks and NBFCs offering fully online services, more customers are switching to app-based banking for their credit needs.
According to the Techmagnate Personal Loan Search Trends Report, the highest volume of searches for ‘personal loans’ came from Bengaluru. It also showed that the overall searches for personal loans in India increased by more than 25% from 2022 to 2023.
City-wise search volumes
| Cities | Search volume FY’22 | Search volume FY’23 | % Growth | Market Share |
|---|---|---|---|---|
| Top 6 cities | 15.77L | 18.44L | 16.99% | 28.41% |
| Next 10 cities | 6.84L | 7.70L | 12.50% | 11.86% |
| Others | 29.03L | 38.78L | 33.59% | 59.73% |
| Total | 51.64L | 64.92L | 25.73% | 100% |
Note: K = Thousand | L = Lakh (1 Lakh = 100,000) | Cr = Crore (1 Crore = 10 Million) | SV = Avg. Monthly Search Volume. Traffic & Sessions are as per SEMrush.
Bengaluru, Hyderabad, Delhi and Chennai are at the top of the list with the highest search volumes for personal loans. Mumbai is next on the list but has seen the second fastest growth after Bengaluru, with an increase of 16.23% in search volumes.
Top 6 cities
| Cities | Search volume FY’22 | Search volume FY’23 | % Growth | Market Share |
|---|---|---|---|---|
| Bengaluru | 3.34L | 4.38L | 31.19% | 23.74% |
| Hyderabad | 3.12L | 3.34L | 7.03% | 18.11% |
| Delhi | 2.96L | 3.34L | 12.93% | 18.10% |
| Chennai | 2.41L | 2.71L | 12.48% | 14.67% |
| Mumbai | 2.23L | 2.59L | 16.23% | 14.06% |
| Pune | 1.72L | 2.09L | 21.74% | 11.33% |
| Total | 15.77L | 18.44L | 16.99% | 100% |
Note: K = Thousand | L = Lakh (1 Lakh = 100,000) | Cr = Crore (1 Crore = 10 Million) | SV = Avg. Monthly Search Volume. Traffic & Sessions are as per SEMrush.
Previously in the Indian personal loan market as well as in international personal loan markets, as personal loan interest rates rise, the borrowing rate decreases. However, the trend in the current Indian market is quite different. The demand for instant loans continues to rise, with search volumes increasing by 25.73% between FY 2022 and 2023 according to our search trends report. This projects that the personal loan market in India will continue to grow steadily over the next few years given that the market conditions remain the same. Other factors contributing to its growth include more digitised loan approval processes and AI-integrated loan eligibility checks.
The growing personal loan market in India is not without its challenges.
1. Growing competition between banks and NBFCs: The increasing competition between banks and NBFCs to attract more borrowers has resulted in rapid digitisation of services and increased competition. As a result, interest rates might get more competitive, which could impact the market.
2. Regulations and policies: Government policies and regulations will directly impact how loans are processed, disbursed and repaid. These policies will also attempt to curb fraud risks and enhance security during disbursals, which will result in longer processes and acceptance rates.
3. Ensuring loan repayments: To ensure higher loan repayment rates, it is important to implement stricter regulations before disbursing loans. However, this will go against the unsecured nature of personal loans, stopping customers from approaching banks.
As you can see in our search trends report, the usage of data-driven consumer insights to adapt innovative digital marketing strategies can catapult banking companies, NBFCs, and fintech companies to a whole new level when it comes to the quality and nature of service offerings. To achieve this effectively, it’s essential to choose the right enterprise agency for BFSI brands that can turn insights into actionable strategies.
When you adapt to the shift in consumer preferences and leverage niche business opportunities, these finance companies can not only lead the industry but also directly contribute to the financial stability and growth of India’s financial sector.
Take a look at some of the key insights from our search trends report.
Stay ahead of the competition by leveraging the data and insights from our report. Or go a step further with our Finance SEO Services to build visibility, attract leads, and strengthen your brand authority in the financial sector. Download the report today to get started.
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