Posted by In today’s world, whenever anybody needs additional funds, he takes out a personal loan, whether for a home renovation or a wedding. In reality, however, an individual has a tough time getting quick approval from nationalized banks since they require numerous documents and verifications. Therefore, the only option available to the borrower in such a circumstance is to take out an NBFC personal loan. The digital route of taking a personal loan can save you time and hassle, as you can apply for the loan and complete the entire process online. Consequently, you can find a variety of NBFCs offering personal loans at attractive rates. Alternatively, you can find out all the details about these loans on NBFC instant loan app, including their tenor and principal amount range.
NBFCs are non-banking financial companies that lend money to individuals and businesses. These NBFCs usually get borrowers’ business when they have trouble getting a loan from a conventional bank. The reason is that these NBFCs have less stringent lending requirements and finance the entire loan amount. Short-term loans can be a good option for people who need money quickly to cover unexpected expenses. As a downside, if the loan amount is more significant, the bank usually approves only a portion of it, while the borrower has to arrange the remainder. In addition, obtaining a bank loan involves a lengthy process and extensive documentation, unlike loans from non-bank financing companies.
NBFCs tend to be less stringent than banks because they do not conduct strict credit checks. The processing time of an NBFC personal loan is another advantage, as the decision to approve or reject a loan application only takes minutes. An NBFC personal loan is also unsecured, meaning no collateral or guarantee. The same cannot be said for bank loans.
Listed below are the benefits of taking a loan from NBFCs
Fluid Rules and Regulations
NBFCs are subject to more lax rules and regulations under the Companies Act than banks governed directly by the Reserve Bank of India. However, it is worth noting that NBFCs have managed to fare relatively well over the past few years, despite the slight chance of default. These examples show systematic money transfer and management without rigid and immovable rules.
Loan Amount
Usually, banks do not approve the entire loan amount. Only a certain percentage will be approved. However, NBFCs agree on the loan amount without attaching any terms and conditions. Therefore, if you want a large loan, apply for an NBFC personal loan.
Customer Service
NBFCs provide better client service during the loan approval process and after the loan has been disbursed. You can enable reminders about the installment deadline, view your loan status, and view your loan history.
Streamlined processing
Most banks are bound by strict procedures, rules, and regulations set forth by the RBI when determining a customer’s eligibility for a personal loan. From the moment you apply for a personal loan using the bank’s instant loan app or by using any other offline source, many rules must be followed to ensure eligibility, documentation, creditworthiness, and the final approval and disbursement of the loan. You may need to wait 1-2 weeks for your account to be credited.
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NBFCs, on the other hand, are known for their faster loan approvals because they are more flexible with lending norms. In most cases, an NBFC personal loan can be approved within a few minutes if you meet all the requirements. It is effortless to apply for a personal loan from the comfort of your own home.
Less Stringent with Credit Scores
It is challenging for a person with a CIBIL score below 700 to get a personal loan from a bank. Several banks have become so strict that they will not accept anything below 750 because of bad loans. At the same time, NBFCs do not judge your creditworthiness solely by your credit score. If your credit score is 600-650, you have a fighting chance, but the loan may cost you more.
Some forward-looking NBFCs and Fintech businesses have looked beyond the credit score and credit history when evaluating loan applicants in the past few years. Artificial intelligence, machine learning, and social media quotient are all used to assess someone’s creditworthiness. Personal loans can be used for a variety of purposes, while mortgage loans are typically used to purchase a home. Compared to banks, NBFCs will be the first to implement these new-age lending techniques and processes.
Conclusion
NBFCs and banks provide business, personal, and retail loans to their customers. While banks are well-known for delivering low-interest rates to their consumers, non-bank financial companies are quickly catching up by offering competitive interest rates to their customers and the best part is that if you apply for an NBFC personal loan by online or offline mode, you can instantly access to the loan amortization schedule online without any inconvenience. Because of their less strict laws and terms and conditions, non-banking financial organizations are becoming a more popular choice for many people. Non-banking financial companies can be a good choice if you need funds quickly and without fuss.