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Why NBFCs are Preferred over Banks for Personal Loans?

NBFC, a Non- Banking Financial Company that deals in various kinds of personal loans, investments, and shares in the market. There has been a notable rise in the number of NBFCs over banks that were popular in the market in India. In a densely populated country like India, the NBFC has changed loan business over recent years. It has caused great interest in online personal loans that have been dramatically improved. However, the Credit Bureau states that the share of NBFC in the market was improved in March 2018 to a charge of 44.92% in March 2020. However, the market cap came down at 42.16%. Personal loans offered by NBFC are high in demand.

The factors that have assisted the NBFCs in developing in India

Better loan providing models

The institution NBFC uses a financial technology that offers the customer a lot of financial products. For a small fee, the friendly technology helps to lend the borrowers a minimal fee, and many lending platforms are well connected with the borrowers. Here, the lenders earn interest and offer money to the borrower according to their respective needs.

Automated risk assessment

Today, trending technologies are touching their heights of success. The NBFC has already motorized the process of underwriting. It increases a good amount of speed in different processes of the application. It also decreases the operating costs that offer great interest rates and enables the customer to use it.

The quick and simple loan process

Within a few minutes, NBFC can improve the loan facility in a faster way. At the same time, the faster approval of the loan enables quick access to the funds.

A better way of data utilization

To use better data, NBFC has not allowed its lenders to borrow on the sole basis of credit score. Many data are considered to scrutinize the application of the loan.

The strong and better security system

Nowadays, the security system plays a vital role in the banking process. Today, the rise in the number of fraud cases has disturbed people a lot. However, the NBFC organization uses advanced technology with more secure and safe information for their customers.

Unique offerings

The services provided by NBFCs have allowed loan offerings by unique and effective financial requirements to its customers, not only through consolidated but also through different loans like consumer loans, wedding loans, two-wheeler loans, automobile loans, home renovation loans, etc. However, there is a diverse expansion throughout the lending markets.

Loan offered to more borrowers.

NBFC is doing its business remarkably by providing loans for different financial demands and many existing bank customers. The unique model of NBFC has allowed business people to get extensive loans that are a difficult process with other traditional banks.

Why NBFCs are a better choice for personal loans?

Easy Online Application Process

The customer does not need a lengthy process offline, but only within a few steps, the customer can complete the process through online mode.

Instant Approval

The customer does not need to stand in a queue for long hours. After applying for the loan in NBFC, you can get the approval of it in just a few minutes.

Shorter Loan Processing Time

The loan’s traditional and obsolete process always takes some days to be sanctioned, and many times, it takes a month. But the service of NBFC allows processing the loan just within a period of 24 hours. Hence, the borrowers are allowed to use it on an urgent basis.

Competitive Interest Rates

NBFC does not regulate the prime interest rate. However, the NBFC organization’s loan interest rates are based on exact prime interest rates. This is why NBFC offers a variety of interest rates with more flexibility to all the customers.

Lenient and simple Eligibility Criteria

NBFC is known to all through its remarkable services. The eligibility criteria of the NBFC help to widen the range of customers. The negative credit score does not impact the criteria of loan sanctioned. This is because NBFC looks to the other aspects and the capability of the customer to repay.

Minimum Documentation

The organization of NBFC does not need maximum documentation but only the minimum ones. In banks, they require more documents, but here the loan is sanctioned easily. People have to face many difficulties for loan sanctioned in the banks.

Exceptional Customer Service

It offers a superior level of minimum documentation needs. These documents help to process the loan with a smooth customer journey from approval to loan disbursal. In every step, the customer journey is superior.

Wrapping up

As noted, there have been some great reasons why NBFCs are winning and creating a significant mark in the financial market. Again, for your information, did you know that the personal loan interest rates offered by NBFCs are meager as compared to banks?

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