Non-Banking Financial Companies (NBFCs) are a good option if you need financial assistance outside of traditional banks. NBFCs have gained popularity in recent years for providing personal loans to people who may be ineligible for bank loans for a variety of reasons, such as credit history, income level, or employment status. In this post, we’ll go over the fundamentals of NBFC personal loans, so you know how they work and what to consider before applying.
NBFC Personal Loan Overview
| NBFC Loan Company List | Interest Rate |
| Tata Capital | 10.99% |
| IIFL Finance | 24% p.a. |
| Aditya Birla Capital | 14.00% p.a. to 26.00% p.a. |
| Mahindra Finance | Variable |
| HDB Financial Services | 36% |
NBFC Personal Loan | Definition
The only places that people could get loans for a very long time were banks. However, this has entirely changed with the entry of NBFCs, or Non-Banking Financial Companies, such as Money View. The popularity of NBFC Loans, also known as NBFC personal loans, is partly due to the various benefits they offer over traditional financial institutions like banks.
Why are NBFC Loans So Popular?
When compared to loans from banks or other traditional lenders, NBFC loans are simpler to obtain. Online apps make it simple for someone to apply from the comfort of their own home.
If the application is completed online, there are very few documentation requirements, and photocopies or even hard copies of the documents are not needed.
Instant loan disbursement is an additional benefit of obtaining an NBFC personal loan. Lenders like Money View distribute loans within 24 hours of an application being approved, whereas some banks take several days to do so.
When it comes to qualifying requirements, NBFC personal loans are less demanding than those of traditional lenders. This implies that applicants will find it easier to obtain personal loans.
Features of NBFC Personal Loan
- Interest Rates: Interest rates on NBFC personal loans can vary from 9% to 45% annually, contingent upon the lender, loan amount, length of time, and, naturally, your credit history.
- Loan Terms: NBFCs offer personal loans with terms ranging from three to eighty-four months. Before applying, contact your lender for more information. In general, NBFCs are more accommodating than traditional lenders, so a longer repayment period may be possible.
- Prepayment Fees: A personal loan can be repaid at any time that works best for you. However, some NBFCs might charge a small fee for this service.
Benefits of Availing of a Loan from NBFCs
- Borrowers with poor credit scores often have their loan applications rejected by banks, which lowers their credit scores. NBFCs offer personal loan options that are specially tailored for these customers.
- Customers usually receive superior customer service from NBFCs both during the approval and post-disbursement processes.
- Compared to traditional banks, NBFCs require little to no documentation for personal loans because the entire process is done online.
- Because NBFC bank loans have less stringent eligibility requirements and verification procedures than traditional banks, they are a better choice in an emergency.
- Usually, banks will approve a portion of the entire loan amount. Conversely, NBFCs approve the full loan amount without any conditions.
NBFC Loan Eligibility
- Candidates for salaries must make at least Rs. 15,000 per month.
- The applicant must have worked for a company for at least a year.
- An applicant must be at least 20 years old at the time of application to be eligible for NBFC financing.
- The maximum age should be less than 60 years old when the loan matures.
- Self-employed people are also eligible to apply, as long as they meet the best NBFC in India’s income requirements for personal loans.
- Those on salaries employed by multinational corporations, commercial businesses, or government agencies are eligible to apply.
Documents Required
- Passport-sized photos.
- Valid forms of identification include driver’s licenses, Aadhar cards, PAN cards, and voter ID cards.
- Rent agreements, utility bills, and other documentation proving an address are acceptable.
- Pay stubs or bank statements can serve as evidence of employment or income.
How to Apply for a Loan with an NBFC?
- Go to the NBFC lender’s official website or Install the mobile app.
- Enter some basic information to see if you qualify.
- Choose the loan amount and repayment period when completing the application.
- Complete the e-KYC procedure.
FAQ
Q1. NBFC Personal Loans: What Are They?
A. NBFC personal loans are a type of personal loan offered by NBFCs. Although banks are typically the preferred option for obtaining a loan, there are several conditions associated with it, such as a high interest rate and strict credit score requirements. On the other hand, an NBFC personal loan can be obtained much more swiftly and easily and offers much greater flexibility about the loan amount and repayment period. The competitive interest rates are a blessing for individuals who require additional funds immediately.
Q2. How much can I borrow from an NBFC?
A. Your credit history, income, employment status, and other financial obligations all have an impact on the amount of personal loan you can obtain from an NBFC. The exact loan amount accepted, however, is determined by the lender’s evaluation of your profile and their policies.
Q3. Can I get an NBFC personal loan with bad credit?
A. Yes, you can. Most NBFC loan providers have a lower credit score requirement. For example, certain loan providers, such as Money View, require applicants to have a CIBIL score of 650 or higher. In contrast, banks typically require applicants to have a CIBIL score of 750 or higher.