Time was when you paid a hefty advance for a vehicle and waited for months for its delivery. Today you can walk into a showroom with less than 10% of the price of the vehicle and drive out within minutes.
Till just a few years ago, you saved for months for a family holiday and combined your savings with LTA to pay for a getaway.
Today you can fly to any destination by paying just 10% of the cost, the rest taken care of by a travel loan. In the past you saved for years for children’s education. People still do that; but many of them are taking education loans—to be repaid when their child starts earning.
|Consumer credit is growing at 30% a year|
|But it has reached only 50% of the target population|
|600mIndians will be eligible for loans by 2015, twice the current figure|
|Smart borrowing strategies can cut the cost of credit by 20-50%|
|Credit to GDP ratio in India is 10%,c ompared to 100% in the West|
That’s why MONEY TODAY set out to prepare a primer on life on credit—a smart borrower’s guide to negotiating the best deals in a world where loan sharks are knocking at your door. In the following pages we present borrowing strategies across all kinds of consumer loans, barring home loans. The reason is simple: a home loan creates an asset and is, therefore, an investment. Other forms of loans fund spending or create depreciating assets.