Diwali, the festival of lights, is today. With it comes a bagful of offers from banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs).
In 2022, most auspicious occasions fall in October, which makes the month even more tempting for consumers as well as lenders.
A substantially large population in India likes to splurge from the onset of Sharad Navratri, marking the beginning of month-long back-to-back festivals like Durga Puja, Dussehra, Eid Milad un Nabi, Karwa Chauth, Dhanteras, Diwali, Govardhan Puja, Bhai Dooj, Chhath Puja, etc.
In order to effectively capitalise on the spending spree and to further augment the buying ability of customers, banks maximise the deals on a number of credit products.
The festive season offers can be categorised into four major verticals.
Cashbacks & discounts
Cashbacks and discounts are the most popular. They are introduced to minimise a portion of upfront costs while making a purchase. They generally run throughout the year. However, the quantum and frequency of such offers increase intensively during the extended period of festivities.
Customers looking to buy gadgets, apparels, home & kitchen essentials, furniture, and electronic appliances can bundle many offers to get the maximum advantage. Credit cards can get you the best deals, while lenders are progressively extending such offers to debit cards and ‘buy now, pay later’ service providers.
Processing fee waiver
Partial and full waiver of processing fees on personal loans, home loans, car loans, loans against property (LAP), etc., can save a sizable amount as the processing fee on a home loan of Rs 50 lakh could go up to Rs 10,000.
Applying for a big-ticket credit facility such as a car loan, home loan, or LAP can help save the one-off charges that are levied for processing your loan.
Pre-approved loans
They are predominantly made to repeat customers and prime categories of existing clientele. Most lenders table pre-approved or pre-qualified offers for a premium credit card, a personal loan on a preferential rate of interest (ROI), a home loan of a higher loan-to-value (LTV) or a car loan to fund up to 100 percent of the ex-showroom value of the vehicle.
A loan against a credit card and a top-up loan for an existing facility at better rates are some of the lucrative offerings for prime customers as one can secure credit on lower interest rates, compared to the conventional interest charges throughout the year.
Furthermore, the approval-to-disbursal cycle of most of these pre-approved offers is swift. This ranges from a minute to a couple of hours.
Spend-based offers
Such offers are generally floated for all customers transacting through credit and debit cards.
However, the quantum of savings remains higher for credit-card spending. These offers are categorically designed to encourage a consumer to spend a set amount during a predetermined duration, following which he can qualify for the spend-based cashback, a gift voucher, bonus rewards, or maybe a complimentary access to a premium privilege and much more.
In a nutshell, the festive season offers definitely provide you with the best deals on almost all credit products. Considering this fact, the lucrativeness of the credit market remains intact throughout the year. The primary differentiation during a festive season arises with the frequency of such offers and the quantum of savings.
The still-underpenetrated credit market in India has a long way to go, as every such festive season bankers cater to a large section of new-to-credit customers. The fresh lines of credit extended to new consumers help lenders to widen their respective canvases, effectively contributing towards credit growth and, ultimately, national economic output.
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