6 smart borrowing strategies for long-term financial health

livemint.com:

In 2023, India's financial landscape underwent some noteworthy changes, particularly in borrowing habits. The retail lending sector experienced substantial shifts, largely driven by the rising demand among young consumers and the expansion of credit to previously underserved areas. These developments are indicative of a broader trend in which consumers are diversifying their borrowing strategies to leverage emerging financial opportunities.

According to TransUnion CIBIL's latest Credit Market Indicator (CMI) report, this shift from traditional secured loans to more flexible and accessible forms of credit, like personal loans andcredit cards, reflects a deeper understanding of both the opportunities and risks present in today’s financial environment. Younger borrowers, particularly those in the 18-30 age group, have shown an increasing propensity for consumption-led credit products, which is a clear indicator of their growing influence in the market. The narrative of the evolving credit landscape is further enriched by technological advancements, which have made credit more accessible across diverse geographic regions, promoting financial inclusivity.

The shift toward flexible yet riskier credit options like unsecured loans highlights a change in consumer behaviour, especially among younger borrowers who prefer digital ways to access credit. This trend not only shows their growing financial savvy but also highlights the importance of smart borrowing practices. As we learn from the changes of 2023, it's crucial to borrow wisely in this year. Here are some key strategies to consider for smart borrowing:

Budgeting and planning: Before delving into the world of loans, take a step back to assess your financial landscape.