Festive seasons are often associated with celebration, family gatherings, travel, shopping, and big-ticket purchases. During this period, banks, NBFCs, fintechs, and digital lending apps aggressively promote personal loans, credit cards, BNPL (Buy Now Pay Later), consumer durable loans, and vehicle loans.
But why does this spike happen every year — and why do borrowers respond so positively?
The answer lies in consumer psychology + marketing timing + emotional triggers.
Why Lenders Increase Loan Offers During Festive Seasons
1️⃣ Peak Buying Behavior
People are naturally more willing to spend, upgrade, gift, and fulfil postponed desires during festivals. Lenders leverage this high-intent phase.
2️⃣ Emotional Decision-Making
Festive seasons trigger happiness, sentiment, nostalgia, and social pressure, reducing logical resistance toward borrowing.
Emotions > Logic = Higher conversion.
3️⃣ Cultural Belief in New Beginnings
Festivals are considered auspicious for purchases like homes, cars, gadgets, gold, renovation, and business expansion — increasing demand for credit.
4️⃣ Fear of Missing Out (FOMO)
Limited-time festive offers, deals, cashback, and discounts make users feel rewarded and time-bound, boosting loan uptake.
5️⃣ Sales & Loan Partner Ecosystem
Brands partner with lenders to bundle EMI schemes, causing an ecosystem of mutual profit and shared customer acquisition.
6️⃣ Better Bonus and Income Cycle
Employees often receive annual bonuses, incentives, salary hikes, and seasonal profits, improving loan confidence.
Marketing Psychology at Play
| Psychology Trigger | How It Works |
|---|---|
| Social Proof | Ads show “everyone is upgrading” |
| Scarcity | “Limited period loan offer” |
| Reward Bias | Cashbacks, vouchers, 0-cost EMI |
| Anchoring | High MRP vs discounted EMI comparison |
| Loss Aversion | “Don't miss the once-a-year deal” |
| Self-identity | Lifestyle upgrade = status symbol |
🪙 Why Lenders Prefer Festive Growth
Higher loan demand = more disbursement volume
Lower acquisition cost due to organic demand
Better cross-sell/upsell for credit card and insurance
Strong merchant tie-ups
Increased EMI-linked consumption data for scoring
💡 Smart Borrowing Tips for Consumers
✔ Calculate EMI-to-Income ratio (ideally ≤ 35%)
✔ Avoid loans only for status or competition
✔ Compare APR, not promotional EMI
✔ Prefer basic needs before aspirational spending
✔ Have emergency funds before festive borrowing
❓ FAQs
Q1: Why do loan offers become cheaper during festivals?
To attract higher demand, lenders offer temporary rate relaxations, waivers, and deals.
Q2: Are festive loan offers always beneficial?
Not always — read terms, especially processing fees, foreclosure rules, and interest slabs.
Q3: Why are gadgets and appliances heavily promoted with EMI?
Because EMI reduces upfront cost, increasing conversion for brands and lenders.
Q4: Do borrowers regret festive loans later?
Regret happens when loans are taken emotionally, not strategically.
Q5: What is the safest borrowing mindset?
Borrow when it supports goals, income, or value creation — not impulses.
Published on : 18th November
Published by : SMITA
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