Securing any kind of loan nowadays is much easier and simpler. Our needs and desires are hence full filled and accomplished. Almost every salaried or self-employed individual has an EMI commitment. This is common especially in the middle-class sector mostly in the metro cities.
Based on a survey conducted middle-class households across Delhi, Mumbai, Kolkata, Chennai and Bangalore spend around a fourth of their monthly take-home income on loan < ahref="http://www.deal4loans.in/content/how-emi-calculated"> EMIs — housing, auto, durables and personal loans. And around two-thirds of these households have taken a personal loan only in the last two years.
Salaried households in Kolkata are the most leveraged across metros, with EMI as percentage of monthly income at a high 27%.Though it's non-salaried Mumbai households who carry the maximum personal loan burden at Rs 1.45 lakh, according to a recent consumer survey by New Delhi-based market analysis firm, Indicus Analytics.
On the other hand we see the investment trend of the middle class sector, there’s a strong stock market cult in Mumbai and Delhi, 46% and 45% investing in it, respectively. The weakest, at 23%, are the salaried households in Chennai. A closer look at the preferred investments confirms the conservative nature of the middle class metro households.
However, gold, provident fund (PF) and fixed deposit (FD) remain the top pick.. While amongst the salaried class, PF is the most preferred choice — 49% of the households put their money in it — followed by gold (40%) and FDs (39%). Non-salaried individuals on an all India basis show a clear penchant for FDs (43%), followed by gold (42%) and PF (31%). Gold remains an all-time favourite for South Indian households, with about one in every two households investing in the yellow metal.
Though new investment schemes have found a trend in the new generation, small savings instruments — post office schemes and chit funds — haven't yet lost their lustre with metro middle class, with a quarter and a tenth of households here invest in the two, respectively. The penchant for such instruments is striking as one moves down South — Bangalore and Chennai have a significant — in high double digits — proportion of households (SEC A&B ) putting their monies in chit funds.
Hence, although there is an increase in the debt ratio in the middle class sector they still have the ability to invest.