Why is Getting a Personal Loan from Non Banking Financial Companies a Better Option?
An NBFC (Non Banking Financial Company) offers an alternative to traditional banks by meeting the financial needs of both retail clients and businesses. Registered under the Indian Companies Act, 1956, NBFCs provide various financial services, including loans, securities acquisition, hire purchase, and leasing. By offering these services, they enhance financial accessibility, including the option to secure a loan from non banking financial companies.
Difference Between Non Banking Finance Companies and Banks
Non Banking Finance Companies (NBFCs) offer greater flexibility compared to banks, with more relaxed loan criteria and the ability to set customized interest rates independent of RBI policies. Unlike banks, which accept public deposits and operate under stricter regulations, NBFCs focus primarily on providing loans and financial services without the authority to take demand deposits. This flexibility enables NBFCs to better serve underserved sectors.
Benefits of Non Banking Finance in India: Personal Loans
Personal loans are popular as they provide a hassle-free and quick access to funds for different needs. NBFC financing is a preferred choice for those looking for personal loans and over 9,680 NBFCs operate in India due to the growing demand for this service.
Here are some benefits:
Flexible Loan Tenure
One of the best features of getting a loan from non banking financial companies is the flexibility in loan tenure. Borrowers can choose to repay depending on their situation and preferences and get a time period ranging from 12 to 60 months. This flexibility allows borrowers to effectively manage their monthly payment sand even repay without penalties in some cases.
Customizable Loan Amount
NBFCs provide customized personal loans designed to meet the specific financial needs of borrowers. They offer both short-term loans for urgent requirements and larger loans for major expenses, ensuring flexibility and accommodating a variety of borrowing purposes. This tailored approach enables borrowers to access the funds they need, precisely when they need them.
Simple Loan Documentation Process
Applying for electric vehicle loan sis straightforward and requires minimal documentation. Borrowers can easily submit applications online and, in many cases, receive funding within just a few days. Many NBFCs have digitized their processes, making applications and approvals more efficient. This streamlined approach allows borrowers to focus on their goals while enjoying fast and hassle-free access to financing for EVs.
Less Strict with Credit Scores
Banks usually demand a CIBIL score of 700 or higher, sometimes even 750, for personal loans, which can restrict access for many borrowers. In contrast, Non Banking Financial Companies (NBFCs) are more flexible and don't solely base their lending decisions on credit scores. They may offer loans to individuals with scores as low as 600-650, though these loans often come with higher interest rates. This approach allows more people to secure the financial assistance they need, even with average credit scores.
Conclusion
NBFCs present a viable alternative to traditional banks for personal and electric vehicle loans. With flexible loan tenures, customizable amounts, simplified documentation, and rapid processing, they provide accessible financial solutions for borrowers. Known for their responsiveness to customer needs, NBFCs adapt to the evolving financial services landscape. Choosing an NBFC for personal loans can enhance the borrowing experience and efficiently meet diverse financial requirements for both individuals and businesses.