TransUnion CIBIL on Thursday said approval rates of retail loan products are expected to decline and lenders are set to tighten their credit policies in the wake of the huge economic impact of the coronavirus pandemic.
Cautioning about a rise in defaults, it said, “The inability of some consumers to pay their debts post the moratorium period ending is likely to adversely impact their scores, and consequently the default probability may see a rise.” Adherence to social distancing norms and limited field travel may impact overall lender collection efficiency, resulting in an increase in roll rates across various buckets, it said in a report.
Personal loans, which include home loan, vehicle loan, credit card, consumer durable loan and education loan among others saw a sharp fall in credit outstanding by Rs 62,861 crore, from an outstanding of Rs 25.53 lakh crore on March 27 to Rs 24.9 lakh crore on April 24, 2020, as per RBI data.
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