19/12/2022
**What are the benefits of an NBFC over a bank for personal loan purposes in India?**
Personal loans are no longer just available in India from banks or unauthorized sources like moneylenders. The emergence and expansion of non-banking finance companies (NBFCs) have drastically transformed the current loan market. Some of the best NBFCs in the Indian market are Hero Fincorp, Tata Capital, Mahindra Finance, IIFL Finance, Aditya Birla etc…
**Why Choose an NBFC for Personal Loans?**
**Online Application:**
Borrowers can apply for personal loans online, which makes it easier for them to compare rates from different NBFCs and get the best offer. A customer can complete the entire application procedure online with just a few simple details.
**Competitive Rates:**
Personal loan interest rates provided by NBFCs are competitive and typically start at around 9 to 11 % annually. NBFCs like Tata Capital, Mahindra Finance, IIFL Finance, Aditya Birla, Hero Fincorp etc… have their internal benchmarks and can set flexible interest rates, unlike banks, which base their loan rates on external measurements.
**Minimum documentation required:**
NBFCs are not required to go through the drawn-out procedures that banks do. Therefore, the number of documents needed is similarly modest. Personal loans will be made available by an NBFC based on the fundamental KYC information, bank statements, and pay stubs. Additionally, since applications are submitted online, a borrower may not even be required to carry the thick documentation.
**Reduced processing time:**
Processing is completed more quickly since NBFCs have more latitude to err on the side of norm flexibility. Compared to the time it takes for banks to approve loans, borrowers can acquire personal loan approval quite quickly. The time it takes to get a bank loan varies from a few days to a few weeks. The processing of a loan application, however, can begin at an NBFC within 24 hours of approval. Borrowers can thus use the funds to meet their immediate financing needs.
When it comes to implementing new technology and other methods to evaluate a borrower's credit profile, NBFCs are more adaptable. However, one must exercise caution when selecting an NBFC from which to obtain personal loans and should only select reputable lenders like Tata Capital, Mahindra Finance, IIFL Finance, Aditya Birla, Hero Fincorp etc…