Benefits Of Taking Personal Loans from NBFCs In India

Why do individuals, firms and businesses choose to borrow money from lenders? This is all because we need the money for all the situations. Lenders ask for certain guarantees while lending money to individuals, but trust is the only thing that matters in some cases.

Any loan is made up of 3 main components: the principal of the loan amount, the interest rate, and the payback period. NBFCs and banks prove to be the most reliable lenders as they are dependable and are bound by certain government policies.

Today, give many NBFCs give out Personal Loans, but it is important to learn the intricacies of such loans before choosing one.

Till a couple of decades ago, banks and individual moneylenderswere all you had when you wanted a loan. Things have changed significantly with the entry of NBFCs.As a borrower, you might be confused as to which type of financial institution is best for you to apply for a personal loan. Should one take a personal loan from a private bank or a public sector bank? What about NBFCs? What about a fintech?

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, they play an important role in the financial condition of the state. In India, the Reserve Bank of India (RBI) is theIndian banking regulator.

What is NBFC?

A Non-Banking Financial Company (NBFC) is not a bank, but it performs a monetary function like banks such as providing loans, credit facilities, investments, other schemes, and so on. NBFCs also provide services to businesses such as the acquisition of shares, stocks, debentures, bonds, and securities issued by the government.

It also enables the services such as hire purchase, leasing, venture capital financing, housing financing and insurance.

Benefits of NBFCs

As a borrower, you have several benefits of taking a personal loan from an NBFC as compared to a bank.

• Fast processing:
  
  Most banks are bound by legacy procedures, rules, regulations, and guidelines laid down by the Reserve Bank of India for assessment. From the moment you apply for a personal loan, 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 yourmoney in your account.
  
  NBFCs on the other hand are known for faster loan processing and approvals as they have more room to be flexible with the norms. Generally, an online Poonawalla Fincorp personal loan can be approved in a matter of minutes if you fulfil all the personal loan requirements. You can easily apply for a personal loan from any place at any time from the comfort of your home or office.
   
• Credit score:
  
  A borrower with a poor credit score is usually not entertained by banks, and his/her loan application is rejected, which further lowers the credit 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.
  
  NBFC personal loan eligibility
  
  Theeligibility criteria are as follows:
  
  - The minimum age should be at least 22 years at the time of applying for NBFC Finance (varies from lender to lender)
  
  - The maximum age at maturity of the loan should be less than 60 years (varies from lender to lender).
  
  - Salaried employees working with a government organization, private firm or multinational company can apply.
  
  - Self-employed applicants can also apply for a personal loan subject to meeting the income eligibility of the best NBFC in India.
  
  - The applicantmay have at least one yearof work experience.
  
  - The applicant must be an Indian resident to avail of the NBFC bank loan.
  
  - The minimum monthly income required for salaried applicants is Rs. 15,000.
  
  - The criteria may differ or vary from one lender to another.

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.