When you are facing an urgent need for money, a personal loan can be a good option. You get the money quickly, and you do not need to use your savings. Also, there is no need to offer security to get a personal loan, and you can repay the loan through EMIs over a given period. While taking a personal loan, you need to decide on the loan amount, interest rate, and tenure.
Though, there is one more factor that you need to consider. When you want a personal loan, you must decide if you want to get the money from banks or NBFCs. In recent times, NBFC companies have become a preferred option for people who want a personal loan. You can also opt for NBFCs rather than banks for your loan to get several benefits.
Read on to learn why NBFC companies are better than banks for personal loans.
What are NBFCs?
NBFCs, Non-Banking Financial Companies, are private entities that offer loan and credit services to people. They do not offer banking services as they do not have banking licenses. NBFC companies offer services like personal loans, business loans, home loans, etc.
In India, public and private banks work under the Reserve Bank of India (RBI). While NBFCs, must register with the RBI, they operate as per the Companies Act. As a result, NBFCs have more freedom to decide their interest rates. They follow a defined internal system to decide the interest rates for various loans.
Why are NBFC Companies a better choice for a personal loan?
If you need a personal loan, opting for NBFCs can offer you better benefits than banks. Here are some of the perks that you can enjoy when you get a personal loan from NBFC companies:
- Online Process: All NBFCs are highly tech-savvy. They follow an entirely online process for personal loans. You need to visit the site or get the mobile app of the NBFC. Then you can finish your loan application in a few minutes. The entire process is online, so you need not go anywhere to get a loan. You need a smartphone or a computer with internet to get a personal loan from NBFCs.
- Quick Approvals: NBFCs are very quick to approve a personal loan. It takes a few seconds to get approval if you meet the set of rules defined by the lenders. After you give the docs and sign the loan form, they will send the money to your account in a few hours. If you have had an old relationship with an NBFC, then they can also offer you pre-approved loans.
- Low Interest Rates: While NBFC companies must register with RBI, they can decide their interest rates. Most NBFCs base their rates on the Prime Lending Rate. This allows them to be more flexible in terms of interest rates. Hence, you can get very good offers from NBFCs for personal loans.
- Flexible Rules: NBFCs are more flexible than banks when it comes to rules for a personal loan. While most banks need a CIBIL score of 750+ for a personal loan, many NBFCs can also accept a lower CIBIL score. Also, NBFCs are very flexible in terms of age, work experience, or monthly income.
- Eligibility: Banks offer personal loans only to salaried people, i.e., those who get a salary every month in their account. NBFCs go easy in this aspect as they also offer personal loans to shop owners or small business owners.
- Documentation: Most banks ask for a lot of docs to process a personal loan, but this is not the case with NBFC companies. They need only a few papers to move forward with the application. You may also submit scanned copies instead to make it a paperless loan process.
- Tenure: NBFCs are known to offer longer tenure to repay a personal loan. Most NBFCs offer tenure of between 60 and 84 months for a personal loan. On the other hand, banks usually cap their loan tenure at 60 months.
- After-sale services: NBFCs are well-known for their after-sales services. You can send your query to them through an email or make a phone call, and they will reply quickly. If your lender is a public bank, then be ready for multiple visits to the bank for every task.
- Offers: NBFCs run a range of offers during the entire year. You can benefit from such offers and reduce the loan cost by getting a waiver on processing fees or lower interest rates. Some NBFCs also offer great deals when opting for personal loan balance transfers.
- Online Access: You can access all details related to your loan using the website or mobile app of the NBFC. You need not visit the bank for any tasks and can sit in the comfort of your home and get your loan approved. Tasks like loan statements, applying for NOC, and making payments can be done easily without any hassles.
- Higher Amounts: NBFC companies also offer high loan amounts for their customers. If you meet their rules, they can give high-value loans in a quick time as compared to banks. If you need more money while the loan is active, you can also opt for a personal loan top-up.
With so many perks on offer, it is no surprise that more people are opting for loans from NBFCs. If you want to get the best deal for your personal loan, then Piramal Finance could be the best choice. Do visit their website to understand the NBFCs and their benefits in detail. They have posted many informational blogs on their website, which can be helpful for any individual. You can also explore various products and services offered by them while visiting the website.