Important Factors To Consider When Choosing The Right NBFCs For Personal Loans

What is your mega plan for this summer vacation – a family vacation abroad or a home renovation? Whether you need a personal loan for business or personal reasons, you will be able to reach your goals without any financial burden on your shoulders. In the recent past, personal loans have evolved into one of the most reliable financial products, serving as a companion in good and bad times. A personal loan from a bank or an NBFC couldn’t be an easier decision, but choosing which NBFC Loan Company is the best and finding NBFCs for personal loans that suit your needs could be quite the problem. 

Important factors to consider when choosing the right NBFCs for personal loans 

Personal Loan Interest Rate

When choosing the right NBFCs for personal loans, it is important to consider the lowest personal loan interest rates in India. The range of minimum and maximum interest rates for different lending institutions varies from one to another. It is important to note that even a marginal difference in the interest rate will significantly alter your EMI and the amount of interest you will pay. 

Loan Amount

It is very important to check the capabilities of the NBFCs that you are considering applying for a quick personal loan to ensure that you can obtain a loan with a sufficient amount. If you need money in parts and would like to pay interest only on the amount you have used, check with your lender if they offer the Flexi personal loan.  

Terms and Conditions

It is very important to contact existing customers of the non-banking financial company before deciding on NBFCs for personal loans. It is possible to learn about the lender’s repayment flexibility, rescheduling option, prepayment option, etc., from the lender’s existing customers. It is also possible to inquire directly with the loan executive of your preferred lender about their loan terms.

Prepayment Options

You must check with the lender you choose if they offer a prepayment option when applying for NBFCs for personal loans. It is also important to remember to ask about the foreclosure fees if there is an option to foreclose the loan. 

 Add-on Benefits

If you are applying for NBFCs for personal loans, check if any additional benefits are provided to you. The add-on benefit refers to the top-up option, the discount interest rate on any other loans, etc. 

What makes NBFCs better than banks for personal loans? 

Quick Processing

NBFCs have recently become a popular source of personal loans for a growing number of people. Unlike traditional banks, non-banking financial institutions provide quick personal loans, sometimes less than five minutes. 

Minimal Paperwork

In contrast to banks, you do not need to submit a lot of paperwork to get approval of the loan. Since modern NBFCs utilize artificial intelligence, machine learning, and ACD approaches, all of these contribute to a more refined risk profile with the minimum amount of documentation required. 

Competitive Interest Rates

One of the most noticeable factors when speaking of NBFCs compared to banks is the interest rate on personal loans. The interest rates offered by NBFCs are competitive in comparison with bank loans. Since NBFCs’ base rates are determined not by the repo rates but by prime lending rates, they have some flexibility in offering better rates to their loyal customers. In contrast, Banks, on the other hand, are exempt from these rules since the Reserve Bank of India regulates their base rates.

Credit history is less stringent

Even if you have an average credit score or no credit history, the good news is that. They also consider other factors, including transaction patterns, ITR, and a few others. They have a holistic approach to credit evaluation that sets them apart from traditional banks. 

Better Assistance

NBFCs always strive to provide their customers with superior hand-held support, whether related to form filling, document collection, or solving any queries they may have. Nevertheless, in banking institutions, individuals who hold an account with one of the bank’s branches are given priority over non-regular customers.

Apply online

Another advantage that NBFCs have over banks is that customers can apply for loans from the comfort of their homes, which makes it easier for them to manage. There are still many banks that follow old-fashioned forms of lending and believe in tedious paperwork. 

Conclusion

The process of obtaining a loan from NBFCs for personal loans is very straightforward. Because there are so many non-bank financial institutions in the country that are reputable, choosing the best one by following the above tips makes selecting a lender easier. You can also enjoy a competitive interest rate, faster approval, and more flexible terms and conditions if you apply for a personal loan from an NBFC instead of a bank.

Read Also: Apply for Personal Loans from Top NBFCs such as Bajaj Finserv

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