NBFCs give out Personal Loans, but it is important to learn the intricacies of such loans before choosing one. You can also get NBFC Personal Loan for bad credit if you understand the procedure and Personal Loan rules and regulations in India.
Traditional banks have been the go-to option for consumers seeking a personal loan for a very long time. However, the situation has changed recently as non-banking financial companies (NBFCs) have emerged as strong contenders. NBFCs have several benefits that make them a desirable option for borrowers looking for personal loans.
Why Should You Choose An NBFC For A Personal Loan?
NBFC personal loans generally offer a fast and convenient way to obtain funds for personal needs. They have fewer requirements and are more lenient with credit scores for approval. It makes them accessible to a wider range of individuals. NBFCs may also offer more flexible loan terms and competitive interest rates compared to traditional banks.
Difference Between Personal Loans From NBFCs and Banks
Banks and NBFCs offer personal loans, but the market share of NBFCs has risen exponentially over the past few years.
NBFCs adopted simpler loan approval processes, in sharp contrast with stringent norms followed by banks. NBFCs and banks follow different benchmarking systems for personal loans. While bank rates would mostly be determined by the Reserve Bank of India’s policy rates, NBFCs have greater flexibility over their interest rates because of internal benchmarking.
What Are The Factors That Are Helping NBFCs To Grow In India?
Better data utilization
NBFCs do not base their lending decision on only the borrower’s credit score. A lot of data points are considered when scrutinizing the loan application.
Automated risk assessment
NBFCs have automated the underwriting process which increases the speed of the personal application process. This also lowers operating costs, enabling NBFCs to offer competitive interest rates to their customers.
The unique financial requirements of the consumers. Through debt consolidation loans, personal loans, wedding loans, consumer durable loans, home renovation loans, vehicle loans, two-wheeler loans, etc.
Better lending models
NBFCs use financial technology to offer better financial products to consumers. For example, peer-to-peer lending platforms connect lenders to borrowers for a small fee.
Benefits Of Taking Personal Loans From NBFCs
You have several advantages of taking a Personal Loan from an NBFC as compared to a bank.
Most banks are bound by legacy procedures, rules, regulations, and guidelines laid down by the Reserve Bank of India for assessment. They follow various rules to assess eligibility, documentation, and creditworthiness and then finally approve and disburse the loan. It can easily take 1-2 weeks to get your money in your account.
Easy With Credit Score
Getting a loan is easier with a good credit score, but NBFCs are generally more flexible than banks when it comes to credit scores. They may sometimes offer personal loans to individuals with lower credit scores or even those with no credit history, as they have an inbuilt mechanism to review the customer profile.
NBFCs provide better customer service to their customers during and after the stages of loan approval and disbursement. Borrowers can view loan status and enable notification on the installment deadline.
Flexible Loan Option
NBFCs may offer more flexible loan options than banks, such as longer repayment tenures or the option to choose between fixed or variable interest rates. If you are unable to manage a fixed EMI, choosing this type of loan may be a better option for you.
Why Should You Choose An NBFC For A Personal Loan?
Simple eligibility requirements
When applying for personal loans with NBFCs, you are not required to meet any stringent eligibility requirements. Your credit score is the main factor that lenders take into account while approving your loan application.
Shorter Loan Processing Time
The traditional loan process takes anywhere between a few days to a few weeks. NBFCs can process a loan application within 24 hours after the approval. Borrowers get to use the money for their urgent funding needs.
Flexible loan terms
NBFCs often offer a larger loan amount than most banks and provide borrowers with flexible repayment options. They also allow you to select the payback period that best aligns with your financial situation.
NBFCs require minimum documents to process the loan, unlike banks where customers are bogged down with exhaustive paperwork.
Competitive Interest Rates
NBFCs’ base interest rate is based on the prime lending rate, which the RBI does not regulate. Hence, NBFCs enjoy greater flexibility and can offer competitive rates of interest to their customers.
Can NBFC provide a Personal Loan?
Yes, NBFCs (Non-Banking Financial Companies) can provide Personal Loans to Customers.
How much loan can I get from NBFC?
The eligibility criteria set by the NBFCs, you can get a loan big amount of up to Rs. 50 Lakh.
Which NBFC in India provides personal loans for salaries?
NBFCs offer Personal Loans for salaries, with varying interest rates, fees, and levels of customer service.
Is it safe to take a loan from NBFC?
Yes, it is absolutely safe to take a loan from NBFCs. You must ensure to visit a secure website while applying for a loan.