What Are The Advantages Of Taking Personal Loans From NBFCs In India

In the constantly evolving landscape of personal finance in India, various new options have come up, among which the most mentionable is Non-Banking Financial Companies (NBFCs) which have emerged as dynamic players in the world of finance. NBFCs have gained immense popularity due to the convenience and advantages that they offer to borrowers. This article will focus on the benefits of opting for a personal loan from NBFCs in India. Let’s start by looking at what NBFC is.

What Is NBCF?

A Non-Banking Financial Company (NBFC) is a financial institution that offers various financial and banking services to individuals but doesn’t have a full banking license. This financial institution offers a wide range of various services, such as wealth management and investments. Loans and advances, insurance, asset financing, as well as money transfer services.

How Is A NBCF Different From A Bank?

As compared to traditional banking services, there are some restrictions imposed on the part of NBFCs; these are:

• They can’t accept public demand deposits.
• They can’t issue cheques drawn on themselves.
• They can’t offer settlement services and payment through a checking account.
• They don’t possess the power to create money through the creation of credit.
• NBFCs are regulated by particular financial regulatory authorities in the respective country. For example, in India, NBFCs are supervised and regulated by the Reserve Bank of India (RBI) under the Reserve Bank of India Act of 1934.

Benefits Of Opting For Personal Loans From NBCFs In India:

Individuals who choose to borrow from NBFCs in India receive several benefits, which are mentioned below in detail:

• Processing Of Loan Faster:

  As banks are restricted by legacy procedures, rules, and various guidelines laid down by the Reserve Bank of India for assessment, the time involved in processing is more. While on the other hand, NBFCs can process and approve loans faster as they entertain the utmost flexibility concerning norms and regulations. Therefore one can apply for a personal loan in any NBFC in India at any time and from anywhere, be it from home or office.

• Loan Approval With Lower Credit Score:

  Banks don’t offer credit to a borrower having a low credit score. The application of individuals with a low credit crore are usually turned down by the bank. However, they can opt for a personal loan from NBFC by providing some extra documentation and paying higher rates of interest.

• Better Customer Service:

  NBFCs offer improved customer service throughout the process of loan application, approval, and disbursement. Borrowers can easily view the status of their loan and enable notification on the payment deadline of the installment.

NBFC Eligibility Criteria For Personal Loan That Proves Advantageous For Individuals

NBFC offers comparatively easier loan criteria as compared to banks. Here are given some common criteria that one needs to meet while opting for a personal loan from NBFCs in India.

• The individual must be at least 22 years of age at the time of application.
• The individual must have a minimum work experience of one year.
• The individual must be an Indian citizen.
• The individual’s maximum age at the loan maturity must not be more than 58 years.
• For salaried individuals, the minimum monthly income required to ensure eligibility is Rs 20,000.

Conclusion:

The simplicity of availing loans, flexibility, and convenience have made individuals consider taking personal loans from NBFCs in India. They don’t entertain the rigidity that conventional banks come with and offer a higher possibility of approval of the loan for those in dire need of it.