A Personal Loan is a crucial financial commitment. Hence, it becomes imperative for you to have a comprehensive idea about it before you apply. Nowadays, both banks and NBFCs provide Personal Loan at favourable interest rates. So, if you are looking for an NBFC Personal Loan, its types, benefits and more, go through this guide.
What is a Bank?
The banking industry leads the way in finance, including cash and loans. Banks are the institutional structures that take deposits and issue loans to individuals and play an important role in the financial condition of the state. In India, the Reserve Bank of India (RBI) is the Indian banking regulator.
What is NBFC?
A Non-Banking Financial Company (NBFC) is a financial entity that provides a wide range of financial services like loans, credit facilities, investments, and other schemes. Unlike banks, NBFCs are not authorized to accept deposits from the public. However, they play a crucial role in promoting economic growth by providing credit to individuals, small businesses, and other sectors that are underserved by traditional banks. NBFCs are regulated by the Reserve Bank of India (RBI) and are subject to various guidelines and regulations to ensure financial stability and consumer protection.
Types of NBFCs
The different types of NBFCs are as follows:
- Asset Finance Companies (AFCs)
These companies help individuals or businesses to finance assets like machinery, equipment, and other tangible assets. They aid businesses in growing and support overall economic development.
- Infrastructure Finance Companies (IFCs)
They play a crucial role in funding projects like power, roads, and telecommunications. Their long-term loans contribute to building strong infrastructure, promoting economic progress and improving the quality of life.
- Loan Companies (LC)
These companies are vital players in consumer finance, providing Personal Loan, Loan Against Property, and more. They fill the gap left by traditional banks, catering to specific financial needs or those with limited access to formal credit.
- Investment Companies
This company type manages financial assets like stocks and bonds for both retail and institutional investors. It contributes to capital formation and responsible investing practices, mobilising funds for productive use.
- Microfinance Institutions (MFIs)
These institutions target economically disadvantaged groups, providing small loans to empower individuals and self-help groups. This helps in establishing or expanding small businesses, lifting people out of poverty and creating sustainable livelihoods.
- Systemically Important Core Investment Company (CIC-ND-SI)
They are a subset of Investment Companies that the RBI closely regulates. These companies hold a significant portion of their assets in investments and play a crucial role in maintaining financial stability.
- NBFC Non-Operative Financial Holding (NBFC-NOFHC) Company
This financial entity which is owned by Non-Operative Financial Holding Company (NOFHC) allows promoters to establish a new bank.
Personal Loan from NBFCs Vs Personal Loans from Banks
The following table provides a comparison of Personal Loan from NBFCs and Personal Loans from Banks:
| Parameters | Personal Loan from NBFCs | Personal Loans from Banks |
| Interest Rates | Higher interest rates | Lower interest rates |
| Eligibility Criteria |
Relaxed eligibility criteria |
Strict eligibility criteria |
| Loan Amount | Provides lower loan amounts |
Provides higher loan amounts |
| Processing Time | Faster |
Slower |
Benefits of Taking Personal Loan from NBFCs
As a borrower, you have several advantages of taking a Personal Loan from an NBFC as compared to a bank, such as:
- Fast Processing
NBFCs are known for faster loan processing and approvals as they have more room to be flexible with the norms. Generally, Personal Loans can be approved quickly if you fulfil the eligibility criteria. You can easily apply for a Personal Loan from any place at any time from the comfort of your home or office.
- CIBIL Score
A borrower with a poor CIBIL score is usually not entertained by banks, and his/her loan application is rejected, which further lowers the CIBIL score. However, these borrowers can get loans from NBFCs subject to certain scrutiny, extra documentation and a higher interest rate.
- Customer Service
NBFCs provide better customer service to their customers during and after stages of loan approval and disbursement. Borrowers can view loan status and enable notification on the instalment deadline.
ALSO READ :- Check Your CIBIL Score Today to Take A Personal Loan…!
Choose What is Right for You
Both NBFCs and banks offer Personal Loans. While banks are known
for their low-interest rates, NBFCs are rapidly reforming by offering
competitive rates to individuals. If you need funds quickly and
without any difficulty, NBFCs are a good solution.
Every person's
needs and requirements are different. Some prefer faster loan
approval, and some prefer larger loan amounts, while some prefer good
customer service. You must choose a lender and product based on your requirements.
- Minimal to Nil Paperwork
There is no collateral requirement which reduces the document requirements while applying for a Personal Loan. Compared to other loans, the documentation for a Personal Loan is simple and faster.
- Quick Approval
With online approval and disbursal, a borrower can apply to get quick approval once you meets all the eligibility criteria mentioned on the official website of the lender.
- Completely Online Application Process
It is easier for a borrower to apply for a completely online loan application process. You can directly apply for a loan from anywhere and anytime. To apply for NBFC Personal Loan via Poonawalla Fincorp, follow the steps mentioned below:
- Step 1: Press the ‘Apply Now’ button.
- Step 2: Now complete the application form by providing details like your full name, PAN card number, monthly income, etc.
- Step 3: Lastly, upload the required documents like your bank statement, PAN card details, etc., and hit the ‘Submit’ button.
If you meet the eligibility criteria of Poonawalla Fincorp, your Personal Loan request will be approved, and funds will be debited from your account.
To Conclude
A NBFC Personal Loan is a flexible and convenient financial solution for you in case you have a shortage of money. So, if you are planning to avail a Personal Loan from NBFC, choose trusted lenders like Poonawalla Fincorp. They provide a Personal Loan at an affordable interest rate and have relaxed eligibility criteria. So, what are you waiting for? Apply for loans now through Poonawalla Fincorp and fulfil your dreams.
Frequently Asked Questions NBFC Personal Loan
1. Can NBFCs provide a Personal Loan?
Yes, NBFCs (Non-Banking Financial Companies) can provide a
Personal Loan to borrowers.
2. How much loan can I get from NBFC?
Once you match the eligibility criteria set by the NBFCs, you can
get a high loan amount of up to ?50 Lakh.
3. How can I get a loan from NBFCs?
You can apply for a loan from NBFCs by visiting the official website
of the lender. If you are not comfortable with the online loan
application, you can visit the official branch of the NBFC and apply
for a Personal Loan offline.
4. Which NBFC in India provides Personal Loans for
salaried individuals?
There are various NBFCs that
offer Personal Loans for salaried individuals, with varying interest
rates, fees and levels of customer service.
5. Is it safe to take a loan from NBFC?
Yes, it is absolutely safe and secure to take a loan from NBFCs.
You must ensure to visit a secure website while applying for a loan.
Also ensure that the NBFC is genuine.
6. What is an NBFC Loan?
Non-Banking Financial Companies (NBFCs) are establishments that
provide diverse and customised financial offerings like NBFC Loans
at favourable terms. They have a well-established presence both
online and offline. This makes it easier for people to avail of an
NBFC Loan to fulfil their specific financial needs without any hassle.
7. Who is eligible for an NBFC Loan?
The eligibility criteria to apply for an NBFC Loan vary among
different lenders. The basic requirements include your age, income
proof, residential proof, and any other criterion laid out by your
chosen lender.
8. What are the types of financing companies that
come under NBFC?
The different types of
financing companies that can be classified under NBFCs include those
that offer loans, asset finance, infrastructure finance, investment, etc.
9. Are NBFCs private or government
entities?
As non-banking companies that operate as
financial institutions, NBFCs must be registered under the Companies
Act 2013 or 1956 as public or private limited companies.
10. Who controls NBFCs?
The
regulatory body for NBFCs is the Reserve Bank of India (RBI). These
financial institutions are governed as per the RBI Act 1934.